Klein pointed out that when it comes to investing in lithium, many shy away from unconventional projects and the markets are not doing so well. However, Elon Musk’s reputation for being both unconventional and successful could impact the lithium industry in a positive way.

If Tesla was the first company to buy and produce a lithium mine, it would attract more investors and funds, which would be needed to produce the amount of lithium one terafactory would need.

“Tesla is the leader in so many things and everybody is trying to copy them to some degree. If VW or GM saw that Tesla got into lithium mining, all of a sudden there would be a rush,” Klein said.

He noted that if Tesla or any other major auto OEM was to buy a lithium mine, it would mostly affect the price of lithium market shares, but not the price of lithium itself. After all, the core reason why an auto OEM would want to purchase the mine would be to reduce the cost of supplies needed to make the batteries.

Klein explained that the demand for lithium will most likely go up from approximately 300,000 tons a year today to 2 million tons a year by 2030 — a 7× increase. “That’s 1.7 million new tons. That’s 75 Piedmonts,” Klein said. This would be necessary in the next 10 years. Further, that investment is not happening today because the price of lithium is rather low.

He also shared that what would drive the price of lithium up (not the share price but the materials price) is simply Tesla and other OEMs selling more EVs. He’s concerned that automakers right now are not approaching the industry correctly and not committing to a high enough volume of lithium, setting themselves up for a price spike in the coming years as EV demand increases. He sees this as a potential brake on the EV revolution, slowing it down a bit.