Elon Musk: Lithium is a “License to Print Money”

As we begin the final month of the year, lithium still shows no signs of slowing down. 

In fact, not only have most market signals strengthened, we continue to stare down the possibility of a widespread shortage. And the certainty of the demand has kept prices up at record levels. 

That’s why Elon Musk recently told Tesla’s investors that lithium was so essential it’s unstoppable. And that mining and refining it was insanely profitable.

Elon Musk license to print money.

Here’s his quote from the earnings call: “You can’t lose, it’s a license to print money.”

His words have led to significant action, both across the industry and for Tesla itself. It’s safe to say were looking at an expansive phase of the new lithium boom.



Lithium refining is a "License to Print Money" Elon says

Musk has already shown the world what he’s capable of with nickel — another essential battery metal.

Tesla recently purchased 75,000 tons of raw nickel concentrate from a mine in Minnesota. He’s also bought his own refinery (and needs to buy another if he wants to process it all). And instead of stopping there, he outdid himself and bought $5 billion more in Indonesia.



Indonesia says Tesla strikes $5 billion deal to buy nickel products

Tesla will soon own its entire supply chain for nickel — from the mine to the finished product. And make no mistake: his motivations are much bigger than just patching a hole in the supply chain.

Given the pressure from the recent shortages and the high prices, Tesla isn’t going to stop until this lithium crisis is solved.

As Morningstar analyst Seth Goldstein put it:

"Should [Elon Musk and Tesla’s management] be serious about entering the lithium space, we think the most likely route would be an acquisition of an existing lithium company.” —Morningstar Analyst Seth GoldsteinHe’s certainly not lacked serious dedication. 

But so far he’s been rather picky when it comes to lithium…

He was in talks with Core Lithium Ltd, but then ended negotiations without a deal. And he met with Cypress Development to potentially acquire their American projects, but again, didn’t settle on a deal.

We’ve got a pretty good idea at what Musk is looking at next.

And it’s not a moment too soon, because if he doesn’t come up with new supplies of lithium, he might risk missing production goals.

As Bloomberg reported, referencing the industry as a whole: “EV sales targets for 2030 are probably unachievable.”

General Motors’ purchasing chief has been blunt about the view from the ground.

“We’re absolutely convinced that this is a race, a zero-sum game and resources are a finite limit.” — Tanya Skilton, Director of Purchasing, General Motors

If Musk doesn’t buy something soon, Tesla will be left behind.

 

Tesla's Lithium lead at risk as rivals make supply deals

It’s not going to be simple.

The Mars-bound billionaire isn’t going to be able to bend this industry to his will.

“Elon’s star power has hit its limit… They’re gonna be short just like everybody else.” — Joe Lowry, founder of industry advisory Global Lithium LLC

Either way, we’re set to profit. 

We don’t need Musk to make a killing on the one-of-kind lithium stock we’re following. It’s going to benefit regardless of how the pieces shake out. A move from Tesla would only be gravy to what’s certain to be a feast.

As Elon said himself, “you can’t lose.” 

Let me show you why this $2 lithium stock is the best place for your investing dollars.

John Carl

John Carl
Editor, Daily Profit Cycle