Elon Musk’s Influence Grows as He Eyes Critical Minerals for the Energy Transition

Elon Musk has ascended to a powerful position within President-elect Donald Trump's inner circle, but for the critical minerals sector, Musk has long been a key market mover. The Tesla CEO has wielded his influence—amplified by his social media platform X (formerly Twitter)—to call for more lithium processing, push for increased nickel production, and invest in a massive lithium refining plant in Texas.

“Elon’s always been there, now the megaphone is bigger,” said an anonymous lithium producer. “This is a pretty small space, so he’s always had a lot of influence.” Musk’s sophisticated understanding of mining may make him an ally for the sector as the Trump administration shapes policies impacting critical minerals, a priority area for the incoming administration.

The specifics of what a Trump administration will mean for the minerals sector remain unclear. Key concerns include the potential impact of heavy tariffs, potential alterations to the 2022 Inflation Reduction Act (IRA), and questions over whether changes will streamline the nation's mining laws, accelerate permitting, and protect U.S. projects from cheaper Chinese imports.

Musk's influence, however, is only growing. Since Trump’s election, Musk has been prominently by his side—whether accompanying Trump to meetings with foreign leaders or social events. Trump has even enlisted Musk to help lead a "Department of Government Efficiency," aimed at cutting costs and reducing regulations, providing Musk an opportunity to sway federal policies that could benefit Tesla, the largest EV maker in the U.S. and a burgeoning player in critical minerals production.

Tesla’s efforts in mining and processing critical minerals, such as nickel and lithium, have already been substantial. For instance, Tesla has agreements to secure nickel from Talon Metals, which is backed by federal support for developing a mine in Minnesota and a processing plant in North Dakota. Musk’s sway over the sector has also extended to exemptions from tariffs on graphite, a key material that China largely controls. Musk has hinted that reduced government subsidies could benefit Tesla by weakening its competitors, such as in the potential repeal of the IRA's incentives for EVs.

Yet, industry analysts believe Musk's immediate focus lies more in regulatory approvals for autonomous vehicles and SpaceX contracts. Conor Bernstein, spokesperson for the National Mining Association, highlighted Musk's longstanding interest in secure mineral production. “As a businessman, he has repeatedly underscored the need for secure mineral production to meet soaring demand—demand which Tesla is driving,” Bernstein said.

Mining companies have already responded to Musk’s push for affordability, aiming to make EVs cheaper. Hugues Jacquemin, CEO of Northern Graphite, emphasized the importance of reducing costs to meet Musk's needs, adding that failing to do so could hamper industry growth. However, Jacquemin expressed concern that the scrapping of IRA incentives, such as the $7,500 rebate for EVs using U.S.-sourced materials, could hinder the development of the domestic mining sector.

Musk's deepening ties with the critical minerals space are evident. Tesla has plans for a lithium refining plant in Robstown, Texas, which could become the largest lithium chemical producer in North America if successful. The facility, covering over 1,200 acres, broke ground last year and aims to produce lithium hydroxide to feed Tesla’s Gigafactory in Austin. The plant is expected to receive spodumene concentrate from Piedmont in Canada and Liontown's Kathleen Valley in Australia.

Tesla's engagement in the lithium supply chain is far-reaching. Musk invited Argentine President Javier Milei to his Texas factory earlier this year, showing interest in Argentina’s massive lithium deposits, part of the “lithium triangle.” Musk’s influence extends not only to production but also to broader policy discussions, with Tesla joining coalitions to support the IRA and advocate for tax incentives to benefit critical mineral producers.