Elon Musk’s INSANE Plan to DESTROY Lithium Prices

the electric vehicle Revolution is fueled by a single crucial component Lithium-ion batteries as Tesla's EVS continue to soar in popularity and other automakers look to ramp up their own production the demand for lithium has skyrocketed causing its price to absolutely explode higher in just two short years the price of lithium compounds have surged from a modest 7 000 US dollars per metric ton up more than tenfold to a staggering 88 thousand dollars per ton with Elon Musk himself stating that lithium prices have gone to insane levels dubbing it the new oil now while the price of lithium is pulled back slightly with Rising interest rates and a slowing economy it's one of the few Commodities that's still up massively keeping costs high for companies such as Tesla and eating into their profits and gross margins however Elon Musk isn't sitting still he's vowed to get Tesla into the lithium business if prices remain high and so it's no surprise that Tesla is now moving full force to try and rein in the costs from this valuable commodity as Elon Musk has plans to destroy the price of lithium and before we continue stop using Yahoo finance stop using Google Finance and have a look at our website the market isopened.com where we have instant stock quotes and a brand new set of financial data going back 15 years and it's all freely available lithium is currently mined and produced by a variety of countries around the world with the largest players in 2022 being Australia followed by Chile China and Argentina while demand for the medal is expected to outpace supply lithium production has actually quadrupled between 2010 and 2021 and continues to grow year after year but mind lithium is different than the lithium that goes into battery packs for electric vehicles it must be processed and refined into battery grade material compounds while China is third on the list in terms of lithium mining capacity the country actually produces more than three quarters of the world's Lithium-ion batteries China gets most of its lithium from Australia and they also control the majority of the world's refining and processing capabilities on the other hand the United States accounts for just a small percent of the world's lithium production attributed to a single lithium brine operate station in Nevada that belongs to albemarle's Silver Peak site that said there are a number of major projects underway in the United States including piedmont's lithium Hard Rock Project lithium America's Thacker pass claystone project and standard lithium's lithium brine project the United States is rich in lithium reserves capable of meeting the demands of the electric vehicle industry however extracting this precious metal is not without its challenges environmental concerns have cast a shadow over some mining projects causing delays in hindering progress in tapping into the nation's lithium reserves these ecological considerations are proving to be a significant obstacle in unlocking the full potential of the country's lithium resources however despite the abundance of lithium ore on the planet Tesla has recognized that the true bottleneck to meeting the worlds and its own lithium needs lies in the refining process Elon Musk has emphasize the need for a dramatic increase in lithium refining as the current capacity is simply not enough to keep up with a rapidly growing demand for batteries in a recent Tesla conference call he urged entrepreneurs to enter the lithium refining industry highlighting the software-like margins and potentially astronomical profits to be made Elon Musk stated that while the mining of lithium ore is relatively straightforward refining it is much more challenging and presents a lucrative opportunity for those willing to invest he'd likened the margins in the lithium processing industry to basically printing money up until now Tesla has received lithium from a variety of suppliers for instance they have a deal that was signed in 2021 with gang fan lithium a top Chinese producer that will supply lithium products to Tesla between the years of 2022 and 2025. companies like live vent and Albemarle have Supply contracts with Tesla and China's Sichuan industrial group has been providing battery grade lithium hydroxide since 2020. Tesla also has a deal with Junior mining companies such as lion Town resources in Australia to provide spodium concentrate to Tesla starting in 2024 and just recently on January 3rd 2023 Tesla amended its agreement with Piedmont lithium to deliver 125 000 metric tons of lithium between the second half of this year to the end of 2025. now not all lithium is created equal there are different types of lithium products and various state ages of refinement needed in order to produce battery-grade materials for electric vehicle battery makers such as Tesla to make use of lithium deposits must first be extracted from the ground through mining operations most commonly in the form of spot you mean lithium brine or clay lithium spajamine is a mineral composed of lithium aluminum silicate that's commonly found in lithium-rich rock deposits called pegmatite the process of extracting lithium from spodiumine involves crushing the mineral and then processing it to remove impurities another popular Source lithium brine is a liquid solution of lithium salts that is found in Subterranean Salt Lakes which are dry lakes that are seasonally flooded also called Sailors these brine deposits are typically found in arid regions such as the Atacama Desert in Chile and the Salt Flats of Bolivia lithium is extracted from the brine by pumping it to the surface where the water is then evaporated to concentrate the Lithia M salts a third source is lithium clay which is a type of lithium-rich sedimentary deposit that's formed from the weathering of lithium-rich rocks lithium clay deposits are typically found in dry desert regions and are often located near lithium-brine deposits lithium is extracted from the clay by a process that involves leaching the lithium from the clay with a solution consisting typically of sulfuric acid now of these three main sources of lithium spodium rocks brines and Clays around 49 percent of Global Production currently comes from spodiumine with the remaining 51 coming from brimes while there is a potential for using certain Clays as a source of lithium there hasn't been any commercial production from this source as of yet however at Tesla's 2020 battery Day event the company outlined its plans to enter the lithium mining industry by exploring this novel approach extracting lithium from clay but unlike traditional methods Tesla intends to utilize table salt in this process a departure from conventional practices that use acids according to Tesla's senior vice president Drew baglino this Innovative extraction method has the potential to reduce lithium costs by 33 percent while this is an untested method at scale Tesla's forward-thinking approach holds promise for the future of lithium Mining and the electric vehicle industry as a whole according to a Patent filed by Tesla that was revealed in mid-2021 entitled selective extraction of lithium from clay minerals Tesla Illustrated that current methods of leeching clay with sulfuric acid and hydrochloric acid not only leech out the lithium but also high concentrations of various other impurity Metals when removing these impurities more lithium is lost which reduces extraction efficiency and furthermore they say that high acid consumption and complicated leech solution purification methods also make the overall process less cost effective and not environmentally friendly Tesla proposes a new method which at a high level involves mixing sodium chloride which is table salt with Clay material and performing a high energy mill then doing a liquid Leach which results in a lithium-rich solution this Innovative approach aligns perfectly with Tesla's highly vertically integrated business model where the company has control over every aspect of the supply chain from mining to the final customer experience as a result Tesla is well positioned to fully leverage the benefits of this new lithium extraction method in addition back in 2020 Tesla secured access to 10 000 Acres of lithium-rich clayland in Nevada where it has proposed to use its new method of extracting lithium from the ground this is a step in Tesla's plan for crushing the sky high prices of lithium if its new method is successful at scaling not only will Tesla be adding its own lithium into the mix but with a 33 reduction in extraction cost it will improve yields also because Tesla released this patent years ago other miners may take note and copy Tesla's process which could bolster the global supply of lithium thus affecting worldwide prices the amount of lithium inside an electric vehicle is actually quite low according to Drew baglino senior vice president of Tesla he states that there are just five kilograms of lithium content in one of Tesla's Vehicles if Tesla plans to produce on the order of 2 million Vehicles this year that equates to a reasonable 10 000 metric tons of lithium but at eighty thousand dollars per ton that's 800 million dollars of cost for such a small portion of the overall vehicle that's equivalent to a meaningful six percent of Tesla's total profits for 2022 and as Tesla plans to achieve an ambitious vehicle production rate of 20 million cars per year by 2030 this could multiply these numbers by a factor of 10 times it's unlikely that Tesla wants to be spending eight billion dollars on just lithium in 2030 even if prices remain flat however the true source of high costs in lithium production can be found further Downstream in the production of battery grade raw material compounds such as lithium carbonate and lithium hydroxide which are essential for Tesla's lithium ion battery manufacturing both compounds can be extracted from spagumine at a fairly comparable cost but converting from one compound to the other through chemical processes requires additional equipment and therefore expenses lithium carbonate is a white powder produced mainly through reacting sulfuric acid with spodiumine to produce lithium sulfate it's followed by the addition of sodium carbonate which is then precipitated and dried to result in lithium carbonate on the other hand lithium hydroxide is made through the roasting of spajamine and calcium hydroxide but this process becomes even more expensive if Salt Lake brine is used as the source material now lithium carbonate is used as a precursor for making the cathodes of Lithium-ion batteries it's normally preferred because it's more easily processed and has lower production cost compared to lithium hydroxide whereas lithium hydroxide is used as a raw material for the production of lithium salts which are used in the electrolytes of Lithium-ion batteries it offers thermal stability and reduces the risk of battery degradation however when used in high nickel battery cells lithium hydroxide is the preferred compound for creating the cathode materials as well so ncm-622 and ncm-523 batteries can either use lithium hydroxide or lithium carbonate but NCA or ncm811 batteries must use battery grade lithium hydroxide and these are the main types of battery chemistries that Tesla uses generally speaking products made from lithium hydroxide usually have better performance and boasts longer lasting batteries lithium carbonate can also be converted into lithium hydroxide but it takes an additional chemical process and therefore added cost but this explains why Tesla has started construction of its own lithium hydroxide refinery in Texas this is a 375ml million dollar facility that's set to employ 165 people plus another 250 construction workers over the next two years according to electric and it's set to begin operations by the end of 2024. Tesla's proposal for the refinery stated that its purpose was for developing a battery-grade lithium hydroxide refining facility the first of its kind in North America as well as facilities to support other types of battery material processing refining manufacturing and ancillary manufacturing operations in support of Tesla's sustainable product line and so while this could still take a few years to be completed and get ramped up in terms of production it will help solidify Tesla's own supply chain for lithium raw materials the prices today are elevated because of low Supply and high demand which is expected to get even worse over the next few years as the electric vehicle Market grows rapidly but lithium isn't as scarce material it just hasn't have been processed in the ultra high volume needed to support so many EVs and that's what's causing the spike in price it's all profit margin for producers like Elon Musk has said since the actual cost of extracting and processing the lithium is relatively low and so Elon Musk is taking advantage of these high margins by cutting out the middlemen who are collecting on the order of 90 percent of the profits and having Tesla produce these minerals for themselves at cost if Tesla can bring their new lithium mining Project online and refine the material on their own especially in the United States which completely lacks refinement capabilities then they may be able to offload a huge amount of their lithium demand from traditional markets thus increasing the supply this could also reduce the need to import lithium now just as when Commodities see high demand and prices Skyrocket the opposite occurs when Commodities see an excess of supply and the prices tend to crash even more rapidly and that's part of Tesla's plan it doesn't take much to cause volatility in a commodity since they're highly sensitive to supply and demand fluctuations not only will Tesla's own Refinery and potentially claim mining operations allow for supply chain stability but because they're such a big player in the market especially in the United States with currently a 75 percent market share in EVS they're partially responsible for contributing to the increased demand and therefore price spikes in lithium by removing themselves at least in part from the equation Global prices May tank allowing Tesla to further save hundreds of millions and later billions of dollars in battery costs whether it produces its own lithium or buys it from suppliers ultimately Tesla will pass on B savings to benefit consumers with lower priced electric vehicles so do you think Tesla will be successful with its new methods of mining lithium from clay which has never been commercially accomplished before and you you think in 2025 when Tesla's lithium Refinery is up and running the first of its kind in the United States if it will indeed help to free up Supply and drastically reduce the exorbitant price of lithium don't forget to watch my video on byd's 803 and ATT electric semi truck please hit the like button and subscribe we would really appreciate that and a huge shout out to all of our patrons that helped us support our Channel your support helps us to continue to make great content thank you guys so much for watching

Channel: TMIO Tesla

Views: 200,658

Keywords: tesla, elon musk, Inside Tesla's Lithium Refining Process for Electric Vehicle Batteries, Tesla is Planning to CRASH the Price of Lithium, Elon Musk’s Plan to DESTROY Lithium Prices, Tesla Begins Construction of NEW Lithium Refining Plant, EXTREME Innovations in Tesla's Lithium Refining Process

Id: GTEgyPw3Ib4

Length: 16min 1sec (961 seconds)

Published: Sun Feb 12 2023