Tesla Hires Geologist: What Investors Should Know

A leading electric vehicle company could be taking a new approach to getting rare earth minerals for its products.

What Happened: Electric vehicle leader Tesla Inc TSLA hired a geologist recently according to a report.

Tesla does not currently mine its own materials and has not announced why it is hiring geologists. The job postings right now are more related to the supply chain, which could indicate Tesla wants people familiar with operations to bridge the gap and not strictly help the company mine.

Tesla has not announced plans to mine its own materials, but CEO Elon Musk has hinted at such an approach.

Related Link: Will Tesla Pull An AMC And Invest In Mining Companies: Here's What Elon Musk Suggested 

Why It’s Important: The price of lithium has soared over the past year, which has increased production costs for companies such as Tesla.

A tweet from World of Statistics highlighted the price of lithium at $78,032 per ton recently, compared to a price of $6,800 in 2020 and $17,000 in 2021.

The tweet got a response from Musk who said, “Tesla might actually have to get into the mining & refining directly at scale, unless costs improve.”

Musk has gone on record several times, including at the company’s Tesla Battery Day in 2020, about the vast amount of lithium available on Earth.

“Lithium is not like oil. There’s a massive amount of it, pretty much everywhere. In fact, there’s enough lithium in the United States to convert the entire United States fleet to electric, all cars in the United States,” Musk said.

At Battery Day, Musk mentioned a new process using table salt to extract lithium, which could become a new business for Tesla and could be the theory behind hiring a geologist.

Tesla has rights to a large lithium deposit in Nevada, which could be in its short-term plans or long-term plans.

Tesla is also partnered with several mining companies in an effort to help its supply chain. Partners for lithium mining include Ganfeng Lithium and Liontown Resources.

With the rising cost of lithium and other materials, some analysts have pointed to the potential of Tesla to make acquisitions in the mining space. The hiring of geologists could strengthen that case.

Tesla is set to report quarterly earnings Wednesday after market close and could be asked about rising lithium costs and mining plans during its earnings call.

TSLA Price Action according to Benzinga Pro: Tesla shares are down 2.47% to $1,002.80 Wednesday morning at publication.

Photo: Guillaume de Germain on Unsplash