Elon Musk's Latest Power Move? The Unexpected Alliance That Could Revolutionize Electric Vehicles

By Javier Sanchez | Tuesday, 14 May 2024 01:50 PM
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Image Credit : InsideJohn Doe

Elon Musk, the Chief Executive Officer of Tesla, has been establishing a close relationship with Argentina's President, Javier Milei, with lithium potentially playing a significant role in this alliance.

Argentina is globally recognized for having the second-largest lithium reserves, a metal crucial for electric vehicle batteries.

In a December appearance on the television program "La Noche De Mirtha," Milei revealed that Musk had expressed his "extreme interest" in lithium during a phone conversation. This interest aligns with Musk's vision for Tesla to manufacture more affordable vehicles. The company announced last month that it plans to introduce "new and more affordable products" sooner than anticipated, possibly before the second half of 2025.

However, the realization of these ambitions largely depends on Tesla securing a sufficient supply of lithium for its electric vehicle batteries at a reasonable cost. The importance of lithium supply security has escalated for companies like Tesla. According to the United States Geological Survey, lithium production outside the US surged by 23% in 2023 compared to the previous year, driven by robust demand from the battery market.

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In May last year, Tesla commenced construction on a lithium refinery in Texas, which is expected to commence operations this year, as reported by Reuters. During the groundbreaking ceremony, Musk stated, "As we look ahead a few years, a fundamental choke point in the advancement of electric vehicles is the availability of battery-grade lithium."

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Musk's overtures towards Milei could indicate that he views Argentina as a potential solution to this lithium supply challenge. Musk met with the Argentine leader at Tesla's Austin factory last month, where, according to Argentina's ambassador to the US, Gerardo Wethein, they discussed Tesla's "investment opportunities" in lithium, as reported by the Financial Times.

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Musk met with Milei again last week and later advised his followers to consider investing in Argentina. Milei, a far-right leader, won Argentina's presidential election last November, a victory celebrated by figures such as Donald Trump. Despite the country's economic turmoil, with inflation rates soaring to approximately 300%, Milei has pledged to restore Argentina's economy, even though his austerity measures have sparked widespread strikes.

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