Part 5/8:
A significant portion of Musk’s discussion covered Tesla's strategic responses to raw material costs, especially lithium. Due to latency inherent in the supply chain—roughly six months—reductions in commodity prices today might only reflect in Tesla’s costs and vehicle prices months later.
To mitigate supply chain constraints, Tesla is building a lithium refinery in Corpus Christi, Texas. Musk explained that Tesla's vertical integration is driven by necessity, not opportunism—lithium is widespread, unlike oil, and securing a reliable supply chain is crucial for maintaining cost advantages and scaling production.