Musk sees “deflationary pressures” on lithium prices

On a Tesla earnings call, Musk says he is “seeing what seems to be deflationary pressures” on lithium prices, which “went absolutely insane there for a while.” He attributes the spike to rising commodity prices that made it difficult to cut costs in 2022. Karn Budhiraj, Tesla’s vice president for supply chain, says the reduction in commodity prices translates into thousands of dollars on a per-vehicle basis, adding that the company is extending some fixed-price contracts with suppliers through the end of this decade to lock in the lower costs.