What happened

Tesla's (NASDAQ:TSLA) Battery Day event earlier this week was not good news for lithium mining stocks like Lithium Americas (NYSE:LAC). (It wasn't terribly good news for Tesla stock, either, for that matter.)

After Tesla CEO Elon Musk voiced his intentions to try his hand at mining lithium from the Nevada desert -- in-house, as a vertical integration of raw materials into battery production -- shares of Lithium Americas (and other lithium mining stocks) tumbled on fears Tesla might not need them anymore.

From last week's close to the end of trading yesterday, Lithium Americas stock fell 30%. But today, some of those losses are being reversed. As of noon EDT, shares of Lithium Americas stock are up a strong 15.9%.

Lithium salt evaporation ponds

Image source: Getty Images.

So what

Why might that be? Curiously, we may find the answer in a negative note about Lithium Americas, which investment banker BMO Capital Markets put out on Wednesday.

As the analyst explained (in a note covered by TheFly.com), it is unlikely that the lithium mining rights that Musk mentioned on Tuesday referred to any deal with Lithium Americas to share use of the latter's Thacker Pass clay project. Instead, BMO believes Tesla has acquired rights to "another Nevada land package" -- doing an end run around Lithium Americas.

Now what

That sounds like bad news for Lithium Americas -- and it may be bad news in the long run. That being said, BMO noted that there is "technology risk" in the way Musk plans to extract lithium from the Nevada clay (by mixing lithium-laden clay with salt water and precipitating out the lithium metal).

Calling Musk's statement, and the underlying technology, "speculative," BMO notes further that it could be several years -- if ever -- before Tesla actually gets its extraction technology to work. In the meantime, Tesla still needs a dependable supply of lithium for its batteries. Companies like Lithium Americas (once it begins producing, at least), can be expected to fulfill that need.

I suspect today's bounce back in Lithium Americas' stock price can be attributed to investors betting Tesla's independence from Lithium Americas, and other third-party lithium suppliers, is something that will come later rather than sooner.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.