For companies to successfully produce more EVs, we need more batteries. To make more batteries, producers need more raw materials. This all comes as no surprise, and Tesla CEO Elon Musk has already noted that the electric automaker may consider getting into mining.
It seems Tesla is ready and willing to enter into new territories if the need arises. However, during Elon Musk's recent interview with Financial Times, he made it clear that Tesla has no plans to acquire another automaker.
There has been talk for years that Tesla could easily acquire just about any other automaker if it wanted to. Just think of it, Tesla would immediately have access to more factories and employees across the globe, which could work to ensure that it can do a better job of keeping up with demand. Due to economies of scale, the US electric automaker could reduce prices. So, why does Musk push back against the idea of Tesla buying a competitor?
You only need to look back at the first paragraph of this article to quickly come to an answer. It really wouldn't matter how much more production capacity Tesla could acquire by buying another automaker if there aren't enough batteries to put in the growing number of EVs potentially produced.
At the recent Financial Times Future of the Car conference, during which Musk, along with several others participated in talks and interviews, the Tesla CEO said that buying another automaker isn't in the company's plans. He has noted in the past that the company would rather build its own new factories than acquire and retrofit existing spaces.
The Tesla Fremont factory was formerly owned by GM and Toyota. It served as the New United Motor Manufacturing, Inc. (NUMMI) from 1984 to 2010. Tesla acquired the NUMMI factory, which was its primary production facility for years, and clearly, the company has learned a lot in the process. Since then, rather than acquiring other factories, Tesla has been building its own new factories from the ground up.
Moving forward in the interview, Musk was asked whether Tesla may acquire a mining company. His reply likely came as no surprise to people who follow Tesla and Musk on social media. The CEO said via Electrek:
"It’s not out of the question. We will address whatever limitations are on accelerating the world’s transition to sustainable energy. It’s not that we wish to buy mining companies, but if that’s the only way to accelerate the transition, then we will do that."
About a month ago, Musk tweeted the following replies:
Following a response by Pranay Pathole, a Twitter user Musk interacts with quite often, the Tesla CEO added a few additional replies:
Tesla has talked about getting into the mining business in the past, though nothing specific has materialized. It has also secured some contracts with companies that can certainly help. However, Musk also said in the recent interview that demand for Tesla's cars is not an issue, and he's confident the company can sell every car it produces.
Musk went on to add that Tesla may stop taking orders for vehicles with long lead times. If this is becoming the case, it seems it may be time for Tesla to consider mining.
As we shared above, Musk said that Tesla will "address whatever limitations are on accelerating the world’s transition to sustainable energy." If Tesla has to halt vehicle orders due to a lack of raw materials leading to a battery shortage, it may have no choice but to acquire a mining company. However, we're not so sure at this point that it's just a lack of batteries causing production constraints.