Elon Musk said it is necessary to increase investment in lithium mining to reduce the gap between the demand and supply of the metal caused by the use of electric cars.
Musk believes that the shortage of lithium needed to produce electric car batteries is the “major limiting factor” hindering the development of the electric car industry.
“We need to help the metals industry in this lithium mining. I would definitely encourage entrepreneurs who are trying to get into the lithium business. Lithium reserves are key reserves for us right now,” Musk said.
Analyst agency Benchmark Mineral Intelligence estimates that the world price index for lithium is up 280 percent in 2021 and another 127 percent in the first quarter of 2022. This increases costs for electric car manufacturers, among them Musk’s own Tesla.
In addition, lithium production is concentrated in a small number of countries, which creates the risk of interruptions in the supply of metal. Thus, Australia and Chile account for 81% of global production – 55 thousand tons and 26 thousand tons, respectively.