Fake Tesla Lithium Announcement Catches Out Unwary Investors

It turns out you shouldn’t believe everything you read on the internet – and not just some of the stuff Elon Musk actually says.

Last week, Tesla boss Elon Musk tweeted:

“Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale, unless costs improve.”

The lithium situation has electric vehicle and battery storage manufacturers feverishly pursuing supply, with prices for spodumene jumping around 82% just in the last year. But someone decided Elon’s thought bubble provided a great opportunity to either pull a prank or a pump-and-dump scheme. Given it’s a little late for an AFD joke – most likely the latter. 

A press release went out Wednesday evening Australian time claiming Tesla had confirmed it acquired Nevada-based lithium mining company Lithium Corporation. The firm is a junior mining company focused on the discovery and development of lithium and other energy and high-tech mineral resources. It is currently developing two lithium-in-brine prospects located in Nevada.

The release was picked up by quite a few media outlets and social media accounts, and Lithium Corporation’s share price rocketed as it spread – briefly. Lithium Corporation subsequently released a statement confirming this was fake news:

“contrary to a press release issued by unknown parties on the 12th of April and rumors circulating on social media, we have not received so much as an expression of interest from Tesla, Inc. and no employees have left Lithium Corporation to take up employment with Tesla. We would be happy to chat with Elon if he was inclined, but presently there is no relationship between the two companies.”

As this announcement became known, the company’s share price quickly dropped back down towards what it was prior. And while it did maintain some gains at the close of trade on the day, at the time of writing it has dropped further.

Australian Tesla Lithium Deals That Did Happen

Tesla has been on the hunt to secure future lithium supplies – including from here in Australia. Back in February, we reported the company had inked a binding sales and purchase term sheet with Australia’s Liontown in relation to Liontown’s Kathleen Valley Lithium Project in Western Australia’s North-eastern Goldfields.

Under the agreement that kicks off in 2024 – which is when the project is expected to start producing – Tesla is to purchase 100,000 DMT (dry metric tonnes) in the first year, ramping up to 150,000 DMT per year in subsequent years. The initial term of the agreement is 5 years.

The Tesla agreement was executed just a few weeks after LG Energy Solution put dibs on up to 150,000 DMT of spodumene concentrate per annum from the Kathleen Valley project.

Then last month, Core Lithium announced it had executed a legally binding term sheet with Tesla for the supply of lithium spodumene concentrate from Core’s Finniss Lithium Project in the Northern Territory. Under that deal, up to 110,000 dry metric tonnes of spodumene concentrate will be supplied to Tesla over a term of 4 years.