What happened
Shares of lithium mining start-up Lithium Americas (LAC) plummeted more than 10% on Friday before turning around and paring their losses in the late afternoon. As of 3:20 p.m. ET, Lithium Americas stock is down "only" 6%.
And you can blame Elon Musk for that.
So what
Responding to a post on Twitter from "World of Statistics" this afternoon, which showed how the price of a ton of lithium has surged 16.5 times in cost over just the last 10 years, Musk reiterated a thought he first expressed back in 2020, on the occasion of Tesla's (TSLA 3.46%) ballyhooed "Battery Day."
Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale, unless costs improve.
-- Elon Musk (@elonmusk) April 8, 2022
There is no shortage of the element itself, as lithium is almost everywhere on Earth, but pace of extraction/refinement is slow.
So once again, Musk is musing publicly about the potential for Tesla to go -- not just into the business of making batteries for its electric cars -- but actually mining the lithium that goes into those batteries in the first place. And if he follows through on that plan, well, you can see why the threat of Tesla competing in Lithium Americas' sandbox might upset shareholders of the latter just a little bit.
Now what
And yet, here's another thought for you:
It's been more than 18 months since Musk first floated the idea of Tesla mining its own lithium. Eighteen months later, Musk just tweeted that "Tesla might actually have to get into the mining & refining."
I repeat: Tesla might "have to get" -- future tense -- into mining.
To me, this sounds like a confirmation that, for the past 18 months, despite suggesting that it would mine its own lithium, Tesla has in fact not taken any steps toward actually doing so. Contrary to what Musk's tweet has investors worrying about today, therefore, I suspect that the real upshot of this announcement is that Lithium Americas and other lithium companies probably don't have to worry about Tesla "getting into the mining & refining" business at all.