Elon Musk wants more lithium, but only a handful of countries can provide the key to electrifying transportation, at least for now.
Head of Tesla Inc. has publicly called for increased investment in lithium mining to close what he sees as a gaping gap between supply and demand caused by the introduction of electric vehicles. Musk has signaled that the electric car giant may finally start mining lithium due to skyrocketing prices. He first mentioned the plan almost two years ago.
There is an urgent need to have a supply line of silver white goods as demand growth will increase dramatically in the coming years. While major manufacturers such as Albemarle Corp. are expanding capacity and building new projects, supply growth is not fast enough due to a lack of investment following the lithium boom-bust cycle from 2017 to 2019.
Currently, lithium production is concentrated in a few countries, with Chile and Australia accounting for 81% of global production. A small number of suppliers means a higher risk of supply disruptions.
Investors shunned lithium manufacturers, developers and researchers after a two-year price drop. At the time, a large amount of lithium capacity was being commissioned, fueled by the electrification hype that saw Tesla and non-hybrid vehicles enter the scene five years ago.
While young mining companies and startups are developing new and greener technologies for lithium mining, none of them have reached commercial scale, leaving car companies like Tesla to rely solely on traditional mining countries , such as Chile and Australia.
