For years, in the market for lithium and other metals used in electric car batteries, only one customer was important: Tesla, Inc.. Even whether these new mines can be supported by the banks depends on whether there is a customer named Tesla, Inc.. For years, Tesla, Inc. and Tesla, Inc. had extraordinary power to determine terms, usually locking in mineral supply agreements for years at a fixed price.

But now that is changing. Tesla, Inc. 's pricing power is being weakened as more traditional carmakers move into new energy vehicles and concerns about tight markets for lithium and other key materials such as nickel and graphite.

The traditional car factory offers favorable conditions for lithium miners, Tesla, Inc. seems unwilling to change.

Ford and GM, the two biggest US automakers, are striking generous agreements with potential suppliers of new energy vehicle materials, including promises of advance payments for future deliveries or low-interest loans to build new mines, transforming the industry.

In June, Ford reached a partnership agreement with Liontown Resources to build a lithium mine in Australia in exchange for a low-interest loan of about $200m to Liontown; in August, Livent Corp, the world's third-largest lithium producer. General Motors Co and General Motors Co will have a six-year agreement starting in 2025, and General Motors Co will pay 198 million US dollars in advance.

By contrast, according to some media, Tesla, Inc. has always refused to work with suppliers to develop new business, while Musk has repeatedly rejected proposals to buy lithium companies or mines to lock in supply. Today, increased competition from major manufacturers has encouraged miners and refiners and exposed Mr Musk's reluctance to adjust his strategy. Market concerns pose a new threat to Tesla, Inc. 's plans to increase production, reduce costs and build his own lithium refinery in Texas.

Tesla, Inc. concluded months-long negotiations with mine developer Core Lithium in October, but did not sign a lithium supply contract. Mr Musk rejected Tesla, Inc. 's offer to buy lithium operations in Australia, Canada and the US, according to people familiar with the matter. Two years ago, Tesla, Inc. acquired US mine developer Cypress Development Corp. Negotiations were held, but no deal was reached. In addition, the market is sceptical about an agreement reached by Tesla, Inc. two years ago that Tesla, Inc. will receive lithium from Piedmont Lithium next summer, while the mining company is seeking approval for a project in North Carolina.

Chris Berry, president of battery metal consultancy House Mountain Partners, believes that Tesla, Inc. 's lead in lithium is disappearing because competitors are throwing money at lithium miners, "but Tesla, Inc. cannot influence the negotiations between lithium miners and competitors."

The shortage of lithium ore may have occurred, and the status of lithium miners has been raised.

The market predicts that with the rapid development of new energy vehicles, the demand for lithium is expected to increase more than fivefold by 2030. Piper Sandler & Co, a consultancy, says sales targets for electric vehicles in 2030 may not be met due to restrictions on various raw materials. The company believes that the cost of the new lithium mine could be as high as $1 billion and that it will take more than six years to build, too slow for demand in the electric car industry.

In addition, some media predict that the shortage of lithium ore will become an industry-wide problem from 2026. CITIC said in a research report this month that the decline in lithium ore grade and the production disturbance and cost rise caused by supply chain disruptions should not be ignored, and the shortage of lithium ore supply has become the "strongest restriction" of the electric vehicle industry chain. it may lead to the operation of high lithium prices for longer than expected.

The IEA takes a more pessimistic view, arguing that the world could face a shortage of lithium by 2025. Credit Suisse is arguing that global demand for lithium mines could triple between 2020 and 2025, which means supplies will eventually run out.

As of 2018, about 44% of the world's lithium mines are still used in traditional industries, such as ceramic glass, and 56% are used in the manufacture of lithium batteries. With the rapid development of new energy vehicles in recent years, the proportion of lithium used in batteries will increase greatly.

This means that lithium mines will be more popular in the market.

Gareth Manderson, CEO of Core Lithium:

How to correctly devote ourselves to the development of this industry is very important to us. If we can't make sure we get the best pricing, we can't do the right thing for our shareholders.

'shareholders are paying more and more attention to the details of the pricing in the supply agreement, and they increasingly think that signing an agreement with Tesla, Inc. or signing an agreement with a traditional car factory is no different,'he said.

Can Tesla, Inc. 's raw material supply be guaranteed?

Although Ford and General Motors Co are actively involved in new energy vehicles, they are still the "latecomers" of the industry. Last year, Tesla, Inc. used about 42000 tons of lithium carbonate equivalent, more than five times the combined consumption of Ford and General Motors Co.

In the short term, Tesla, Inc. 's lithium supply looks secure. In a document released in May, the company disclosed that it had signed supply agreements with four main participants: us-listed Albemarle and Livent, and China's Ganfeng Lithium and Sichuan Yahua Industrial Group.

Mr Musk has often tried to play down concerns about lithium supplies. Two years ago, he promised shareholders that he would use his mining rights in Nevada to start using new, more sustainable methods to produce lithium. But little progress has been made and Mr Musk has doubts about going directly into the mining industry, which faces complex environmental challenges and often struggles with cost overruns, according to people familiar with the matter.

As for the current situation, Joe Lowry, founder of consulting firm Global Lithium, believes that:

As the competition heats up, Tesla, Inc. faces the risk of limited supply. Musk's star power has reached its limit, and they will be shorted like other companies.