Elon Musk has ascended to a powerful perch within President-elect Donald Trump’s inner orbit — but for the critical minerals sector, he’s already a market maker.
Wielding the power of X, formerly Twitter, the Tesla CEO has shaped the sector — calling for more lithium processing, pushing miners to produce more nickel for the vehicles rolling off his assembly lines and now investing in a massive lithium refining plant in Texas.
“Elon’s always been there, now the megaphone is bigger,” said one lithium producer who was granted anonymity to speak freely. “This is a pretty small space, so he’s always had a lot of truck.”
Musk’s sophisticated knowledge of mining could make the tech billionaire an ally for the sector as the Trump administration formulates policies for an industry the president-elect has pledged to support.
But it remains unclear what Trump could mean for the sector, including worries about negative impacts from his promise to levy heavy tariffs to potential plans to gut the 2022 climate law, the Inflation Reduction Act. Questions remain too about whether Trump and a Republican Congress will manage to reshape the nation’s more than 150-year-old mining law, accelerate permitting, prevent an onslaught of cheaper Chinese material from having a ripple effect on projects in the U.S. and alleviate choke-holds around processing minerals.
Even so, Musk’s authority in recent weeks has grown, and he’s poised to have more sway over the very markets that feed his businesses. Since Trump was elected, Musk has been at his side, appearing on calls with foreign leaders; watching ringside at UFC events; eating McDonald’s on a private jet; and hanging at the Mar-a-Lago Club in Palm Beach, Florida. On Tuesday, Musk brought Trump to a rocket launch at his Texas SpaceX facility.
And Trump has asked Musk to join pharmaceutical entrepreneur Vivek Ramaswamy in running a nongovernmental “Department of Government Efficiency” tasked with offering major cost- and regulation-cutting plans for the federal government. That gives Musk a major opportunity to sway Trump on federal policies and influence decisions that give Tesla — the nation’s largest electric vehicle maker and a soon-to-be critical minerals producer — a leg up on its competition.
Musk’s input could help shape a nascent mining and processing industry in the U.S. that is attempting to pump out domestic EV battery metals like lithium and graphite.
Conor Bernstein, a spokesperson for the National Mining Association, said mining is not a new focus for Musk.
“While we certainly wouldn’t hazard a guess as to the exact role Mr. Musk will play in shaping the Trump administration’s mining policy, as a businessman he has repeatedly underscored the need for secure mineral production to meet soaring demand — demand which Tesla is powering and which he has a unique perspective on where it’s headed,” said Bernstein. “He also, importantly, appreciates the need to cut red tape and streamline duplicative permitting processes to unleash domestic industry.”
Musk’s calls haven’t gone unanswered. Tesla, for example, has already inked agreements to secure nickel, a key EV battery ingredient, from Talon Metals. The company, with federal backing, is pushing to build a mine in Minnesota and a processing plant in North Dakota, and recently had a nickel-copper discovery in Detroit’s backyard in Michigan’s Upper Peninsula.
The Tesla CEO has pushed back on tariffs and has for years secured exemptions for Tesla when it came to duties on graphite, a material that China largely controls. But he’s signaled that an unassisted EV market with curtailed government subsidies could benefit Tesla, by weakening its competitors. In the “long term, it probably actually helps,” he said on a Tesla earnings call in July about the prospect of overturning incentives in the 2022 Inflation Reduction Act.
“We would not expect Musk to oppose plans for overhaul of the IRA consumer tax credit, his view appears that Tesla would be best placed to weather its removal,” said Iola Hughes, head of research at Rho Motion, a United Kingdom-based EV and battery information services company that is part of Benchmark Mineral Intelligence.
But Hughes also said Musk is arguably more interested in regulatory approval for autonomous vehicles and SpaceX-related contracts at present, and said Trump’s nomination of an oil executive to lead the Energy Department — Chris Wright — will have more of an influence on the fate of the IRA than Musk at this stage.
Mining companies have already been heeding Musk’s calls for cheaper vehicles, an approach that Hugues Jacquemin, CEO of Northern Graphite, said is smart. Musk has zeroed in on delivering a vehicle to the end customer by focusing on affordability, and producers of critical minerals also need to listen to customers and come up with cheaper solutions, he said.
But Jacquemin said he’s concerned about the Trump administration scrapping IRA incentives, including the $7,500 rebate for new cars because that credit also requires EV makers to use graphite made in the U.S. or allied and partner countries, including Canada.
Those incentives, he said, are critical for the mining sector’s overall viability because they prod EV makers to sign offtakes for domestic materials like graphite, allowing mining companies to attract investors and build out much-needed supply chains.
The Biden administration earlier this year issued guidance that requires companies to reach offtake agreements with suppliers of IRA-compliant graphite by 2027.
“If I’m not cheap, I’m not going to be able to meet his needs,” said Jacquemin. “If I don’t meet his needs, then the industry is not going to grow. And everybody is following him.”
Patrick Donnelly, the Great Basin director for the Center for Biological Diversity, which has fought mining projects, said the bigger question is whether Musk will help gut bedrock environmental laws like the National Environmental Policy Act or the Endangered Species Act, as well as scientific research. Those goals, he noted, were laid out in Project 2025, policies that Trump has since tried to distance himself from.
“Gutting those laws will limit the public’s ability to participate and influence permitting, which could have a huge impact on how and how quickly mines are permitted,” said Donnelly.
Lithium hunt
Musk’s — and Tesla’s — connections to critical minerals and mining are far-ranging. They’re also a bit murky.
In 2016, Musk appeared eager to buy a startup focused on extracting lithium in California’s Salton Sea, according to an article in the Desert Sun, but that deal soon fell apart.
Four years later, Musk announced onstage at the company’s “Battery Day” event in Fremont, California, in 2020 that the company had found a “sustainable” way to use table salt to extract lithium from clays in Nevada, and that the company had gotten rights to a lithium claim deposit covering more than 10,000 acres in the state. He stopped short of providing the location.
“We sort of take a chunk of dirt out of the ground, remove the lithium and then put the chunk of dirt back where it was,” Musk said from a sun-drenched stage. “It will look pretty much the same as before. It will not look terrible. It will be nice.”
Musk did not respond to a request for comment when asked whether the mining project moved forward.
In April, Musk invited Argentine President Javier Milei to his factory in Texas. Argentina is home to massive lithium deposits, being part of the “lithium triangle,” and the fourth top producer of the silvery metal in the world.
Today, Tesla is at the helm of advancing a lithium processing plant in Texas — a move that breaks what Musk has said is a clear bottleneck given China’s dominance over that part of the supply chain.
Tesla broke ground on the project in Robstown, Texas, in May of last year. The facility on the Gulf of Mexico could be the largest lithium chemical producer in North America if it’s successful, said Cameron Perks, the product director of lithium at the U.K. mining data firm Benchmark Mineral Intelligence.
Tesla has said the facility, covering more than 1,200 acres, will represent an investment of more than $1 billion in the area and accelerate the world’s transition to sustainable energy and an aggressive increase in the supply of battery-grade lithium hydroxide in North America.
Tesla has also said the plant could process recycled batteries and manufacturing scrap in the future. The plant is poised to produce battery materials for Tesla’s Austin Gigafactory, which builds the Tesla Model Y, Tesla Semi and Tesla Cybertruck.
The plant will be the first modern spodumene conversion facility built in the U.S. and the only operating one in North America, said Cameron Perks, the product director of lithium at the U.K. mining data firm Benchmark Mineral Intelligence. Spodumene is a lithium-rich mineral used to make lithium-ion batteries for EVs. It will also be the largest lithium chemical producer in North America, if it’s successful, said Perks.
The plant is poised to be fed spodumene concentrate and Tesla has offtakes with Piedmont in Canada and Liontown’s Kathleen Valley in Australia, said Claudia Cook, an analyst with Benchmark.
Tesla’s lithium project is poised to play into Musk’s thinking on big ticket policies. Earlier this year, Tesla notably joined a broader coalition and signed onto a letter that backed the Inflation Reduction Act and called for a broader application of tax incentives to benefit critical mineral producers.
“Without a robust, secure supply of domestic critical minerals and battery components, increasingly stringent sourcing requirements tied to 30D eligibility could make fewer vehicles eligible over time,” the coalition wrote.
