The success of Tesla, the world’s leading electric car manufacturer, is closely tied to lithium, the key component of the rechargeable batteries that power their vehicles. As demand for Tesla’s electric vehicles grows, the world is keen to know where the company gets its lithium from.
Tesla sources its lithium primarily from Chile and Argentina, countries that have reserves of the metal buried in the earth. Chile boasts one of the world’s largest reserves of lithium, estimated to cover 28% of the total global supply. It is the world’s leading lithium producer and supplies the United States, China and India with the metal.
Comprising 70% of the global share of lithium production, Argentina is also a significant source of the metal for Tesla. In fact, the company recently announced a five year deal to supply an entirely new battery cell factory in the country with lithium hydroxide. Although exact production figures of its lithium mines remain unclear, Argentina is estimated to obtain over half of its lithium production from Salar del Hombre Muerto, an ancient lake-bed in the Andean foothills which is home to an enormous deposit of the metal.
In addition to the major global producers, Tesla also sources lithium from Canada, Mexico, and China. In Canada, Tesla relies on the limited volumes of lithium metal produced in Saskatchewan. Meanwhile, Mexico’s Sonora state also provides Tesla with a source of the metal.
In an effort to secure a steady and reliable source of lithium, Tesla has made moves to explore, develop, and acquire lithium assets. In 2020, the company collaborated with Australian mining giant Orocobre to test an experimental way to extract lithium from the brines of a Utah brine lake, tapping into one of the world’s largest brine deposits to develop a sustainable and renewable lithium extraction process.
Adopting a new, greener approach to producing lithium, Tesla has also invested in American start-up Simbol Materials, which has developed a patented method to extract vast amounts of the metal from California’s geothermal brine ponds.
With its efforts to operate a sustainable and responsible lithium supply chain, Tesla is revolutionizing the way lithium is produced and procured, opening up new and alternate sources that are not only more environmentally friendly, but also enhance the company’s own supply security. The continued success of the electric car giant is closely intertwined with lithium. As demand for Tesla’s products only continues to rise, so too will the demand for the metal that powers them.