Tesla’s Move into Lithium Mining Could Hurt Global Pricing: Morgan Stanley
Tesla’s global influence shouldn’t be surprising. However, the electric vehicle (EV) giant has had a major impact on whole industries in the past, and now it’s being evaluated for its role in mining a metal which is common throughout the world.
At its Battery Day event on Tuesday, Tesla (TSLA) announced it would work towards mining more lithium for its batteries – a move that Morgan Stanley says could weigh in on global lithium prices, as reported by S&P Global.
Between a new tab-less battery cell technology, upgraded and cleaner lithium mining practices, and a $25,000 Tesla within the next few years, along with a new Model S Plaid announcement, Tesla really covered its bases on Battery Day.
Estimates of Tesla alone requiring ~2.5 mt LCE. "Significant shortages" – where's all that lithium coming from? https://t.co/qAABjdOHRj
— European Metals (@CzechLithium) September 23, 2020
Morgan Stanley analysts told reporters, “Tesla announced improvements to battery technologies that are likely to support EV sales in the longer term, but also to reduce lithium usage and production costs.” They continued, “They also announced their own lithium mine with a new, lower-cost and more sustainable process. Lithium stocks [likely] to react negatively.”
While new technologies in lithium mining are the driving force for Tesla’s new, cost-effective procedures for mining lithium. However, it’s not unlikely that the choice to use lithium at ever-increasing volumes is not likely to bode well for the lithium industry or for metals in general.
At the time of writing, Tesla (TSLA) shares are trading at $388.08, down 8.52% from yesterday.