Tesla CEO, Elon Musk on Wednesday urged entrepreneurs to step into the lithium industry, more specifically the lithium refining business. Considering the sky rocketing demand for electric vehicles, and the limited supply of processed lithium, Elon termed the lithium refining business as a “license to print money”.
Being a primary component for batteries in electric vehicles, lithium has been a constant demand for years now. This demand for lithium is directly related to the growth of the EV industry. While the EV industry is now valued around $185 billion, it is expected to be valued at $823.75 by 2030.
With numbers and circumstances being so promising, Elon while talking about the lithium refining business said that “It is basically like minting money right now. There’s, like, software margins in lithium processing right now,” he said. “So I would really like to encourage, once again, entrepreneurs to enter the lithium refining business. You can’t lose.”
Adding to his statement, the Tesla CEO went onto explain why lithium is a winning business. He said that the world has an abundant lithium resource, and availability is not a problem. What’s missing is refining industries that can refine lithium to an extent where it can easily be used in electric vehicle batteries. “You have to refine the lithium into battery-grade lithium carbonate and lithium hydroxide, which has to be extremely high purity,” Musk said.
A 400% Per Year Price Increase
The world has loved the idea of electric vehicles and almost every other car manufacturer has started or are looking forward to start their own series of electric vehicles. However, the lithium industry wasn’t really ready for a shift of this scale thus causing a huge shortage in supply and a drastic 400% price increase over the last year.
Experts believe that using lithium at the current rate would cause a huge scarcity and there won’t be any battery grade lithium left for electric vehicles in the future. However, to fix this demand and supply problem, many large EV companies have partnered up with startups that are slowly working towards established consistent supply channels for them.