Musk appeals for more lithium production to meet battery demand

TESLA chief executive officer Elon Musk made a public appeal for more investment in lithium mining to close what he sees as a yawning gap between supply and demand that's being fuelled by the adoption of electric vehicles.

Battery production, and more specifically lithium, is the "fundamental limiting factor" for electric-vehicle adoption worldwide, Musk said on an earnings call with investors Wednesday (Apr 20).

"We think we're going to need to help the industry on this front," Musk said. "I'd certainly encourage entrepreneurs out there who are looking for opportunities to get into the lithium business. Lithium margins right now are practically software margins."

Earlier Wednesday, Tesla reported a record first-quarter profit, helped in part by raising prices.

An index of global lithium prices compiled by Benchmark Mineral Intelligence surged 280 per cent in 2021 and another 127 per cent in the first quarter. Soaring prices for lithium, a key ingredient in EV batteries, are increasing raw material costs for carmakers such as Tesla. BLOOMBERG