Tesla boss Elon Musk urges entrepreneurs to enter the lithium refining market

Companies such as Wesfarmers are sitting on a “licence to make money” according to Tesla boss Elon Musk, who has urged entrepreneurs to jump into the lithium refining market to take advantage of “insane” prices for the battery metal.

The WA conglomerate is one of a number of companies working on value-adding lithium hydroxide plants aimed at meeting sharply rising demand for lithium from auto makers such as Tesla.

Mr Musk made the comments during Tesla’s second-quarter earnings call with investors on Thursday, noting there was evidence that commodity cost inflation was tailing off and lithium prices would likely trend downwards.

However, he warned investors to take the prediction with a grain of salt.

It comes after Tesla this year signed a major five-year lithium deal with WA mineral exploration and development company Liontown Resources.

Mr Musk has also signed deals with Wesfarmers’ Covalent joint venture with Chilean lithium giant SQM, which is developing a mine and processing plant, along with BHP’s Nickel West.

Earlier this month, it was reported that the Tesla chief was set to visit WA to talk to battery metals players who may be able to offer raw materials to his growing battery and electric vehicle empire.

Tesla reported that its second-quarter earnings beat Wall Street estimates. The market leader in electric vehicles posted adjusted earnings of $US2.27 per share, besting analysts’ expectations for $US1.83 per share.

The company also announced it had dumped 75 per cent of its Bitcoin holdings, despite Mr Musk being a heavy crypto booster last year.