The Dealmaker Deals with a Setback

On Behalf of | Dec 28, 2020 | Business Law

To say Elon Musk is an innovator would be an understatement. Tesla, the company he founded, is well known for selling electric cars at premium prices to a wealthy demographic, far beyond what the average consumer can afford. To cast a wider net, not to mention increase his company’s market share, he has committed to manufacturing less expensive cars and longer-lasting batteries that power them.

By removing the “middle-man” and taking on mining operations, Musk predicted that his car batteries’ lithium costs would decrease by one-third.

Elon Musk: Lithium Mining Mogul?

Always looking to garner attention, Musk selected “Battery Day” event to announce that his company had secured the rights to a lithium claim in Nevada with 10,000 acres of clay deposits. They would begin developing its own lithium processing by responsibly mining the raw material in an environmentally friendly manner by using the simplest of household items.

Table salt, formally known as sodium chloride.

Tesla was looking to acquire Cypress Development Corp., a Nevada-based company, to mine the lithium. Less than seven days after the initial announcement, negotiations fell through, quite uncharacteristic for Musk, a savvy and successful dealmaker.

Being able to mine their own lithium will significantly lower costs to provide consumers an affordable car with a sticker price of $25,000. Deal, no deal, or future deal, Musk wants to reach that goal in three years. Industry experts question his aggressive timeline, asserting that mining alone would take four or more years.

As is customary, Elon Musk may be slightly down, but not out.