When Elon first mentioned getting into mining I was as surprised as everyone else.
But after watching a lot of videos (I linked some in the battery day thread)
Tesla Battery Investor Day
My hunch is a 60% chance Tesla would get into mining and processing of battery raw materials.
The reasons to do it are the same as the reasons to do anything else:-
- Assets are well priced, relative to future cost savings.
- Supply certainty de-risks other investment decisions
- Investment in Battery raw material mining and processing lags projected future demand - price spikes/materials shortages are likely.
- Tesla can scale vehicle and cell production - this is a potential bottleneck.
Some mining and materials projects are "shovel ready" what they need is capital, others need R&D so are higher risk but offer potentially higher returns. Projects of both types exist in the US, and are at early stage..
My hunch is that investments might reduce the cost of raw materials for a car battery by a significant amount.
My guess 5-7 year payback, perhaps shorter, 20-50 year operational life.,
There is also the "Tesla effect" that this will get other investments off the fence, and get other projects built...
When people say some other type of battery might obsolete Li-ion, the questions are:-
1) What is that battery?
2) When will it be ready at scale?
Every Tesla sold in the next 1-2 years possibly sells another 5 Teslas over the next 5-7 years..
It is by no means a certainly that Tesla would get into mining and processing, but it isn't something they should dismiss without a "deep dive". They have done that "dive" and we will find out the answer on Battery Day.