No business or sector is safe, and less so in these times with a troubled economy. But the richest man in the world thinks otherwise and sees a clear opportunity in a very specific branch, due to the high demand that is expected in the future.
Elon Musk, CEO of Tesla, this week encouraged entrepreneurs to bet on lithium refining, ensuring that the rise of the sector in the coming years will be equivalent to having “a license to print money.” “You can not lose,” says the tycoon.
The mineral is still abundant in nature – “it is one of the most common elements on Earth”, recalls Musk -, and the complex thing is to convert it into the type of refined lithium useful to be used in the batteries that will then power the different devices. electronics, especially electric vehicles towards which the car industry seems to be moving.
“It’s basically like printing money right now. There are software-industry-like margins on lithium processing today,” Musk said.
The figures, for the moment, agree with the founder of Tesla and SpaceX. The demand for lithium adapted for use in batteries has skyrocketed this year, leading its price to grow 120% since January and almost 400% in the last 12 months, according to data from Benchmark Mineral Intelligence.
“Mining is relatively easy, but refining is much more difficult. You have to refine it into battery-grade lithium hydroxide and lithium carbonate, which is extremely high in purity,” he said in the conference call following the presentation of Tesla’s quarterly results.
“This is quite difficult and requires a lot of machinery and is difficult to scale,” warns Musk.
For this reason, Drew Baglino, vice president of Tesla, added that the firm is working on refining lithium by themselves, “because the best way to learn how to accelerate something is to do it yourself.”
Keep in mind that 6.75 million electric vehicles were sold in 2021 alone, which meant doubling the figures for 2020 – a weak year in sales due to the pandemic. For this year the figure is expected to exceed 9 million vehicles. And this is only a fragment of the lithium battery market around the world.
