Tesla CEO Elon Musk isn’t against entrepreneurs building smartphone apps, but he wants more of them to focus on heavy industry, where he says the opportunities are “tremendous”.
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Tesla CEO made the comments during a conversation with Ford CEO Jim Farley in a Twitter Spaces event Thursday night. The two announced that Tesla boost stations would become available to owners of Ford electric vehicles (much to the chagrin of Tesla customers already facing long wait times).
At one point in the conversation, Farley asked Musk about his experience processing raw materials near Corpus Christi, Texas, where Tesla opened a lithium refinery earlier this month.
Lithium hydroxide, which the facility will package and ship, is an essential component of electric vehicle batteries, but it is in short supply in the domestic market. Musk said Thursday that there was plenty of lithium in the world, but Tesla had identified a “significant bottleneck” in its processing. It’s something Tesla would rather not do itself, he added, but is forced to do.
“Our real goal is to do as little as possible, but we end up hitting those choke points – or we plan to hit choke points,” he said. “So a lot of vertical integration is really out of necessity.”
Musk said Tesla would gladly use suppliers instead if they “solved the problem” and clearly could continue to meet the automaker’s production needs, which could then redirect resources elsewhere.
Tesla has also built a facility at its Texas gigafactory to produce cathodes, another key component of electric vehicle batteries.
“The over-allocation of talents“
Musk said he wants more entrepreneurs to get involved in heavy industry.
“I see so many entrepreneurs in Silicon Valley starting a software startup or sort of chasing the latest big thing. But not enough talent in North America is going into heavy industry,” he said. “And the craziest thing is that the opportunity in heavy industry is huge. So I would really like to encourage entrepreneurs to think about things that don’t involve, you know, ending up on a phone, basically.
He added: “Apps on the phone, we need that, but like, you know, I just think we’ve got an over-allocation of talent towards apps on the phones.”
Venture capitalist Paul Graham, co-founder of startup accelerator Y Combinator, commented on the “dominance of software companies” last month, Tweeter“Creating physical stuff is hard. But don’t let that put you off, if that’s what you’re into.
Musk replied“Not enough talent in manufacturing and heavy industries.”
It turns out that an entrepreneur focused on manufacturing for the electric vehicle space was one of Tesla’s first employees: Sila Nanotechnologies CEO Gene Berdichevsky. His company, founded in 2011, makes an anode material that can replace graphite, another mineral bottleneck for electric vehicle batteries. The United States imports all of its graphite, according to Wards Intelligence, nearly a third of which comes from China.
“I strongly believed that all ground transportation would become electric, and the big limiting factor was lithium-ion battery chemistry and performance,” Berdichevsky told the Washington Post in March.
A year ago, Mercedes-Benz announced that it would incorporate Sila’s silicon anode chemistry into the batteries of its upcoming G-Class electric vehicles.
Musk told Farley on Thursday that Tesla was trying to figure out, “Do we need to do the anode too? Hopefully not. If anyone else could do that, that would be awesome. Synthetic graphite, there is a big market for that. He recommended contractors consider providing it.
This story was originally featured on Fortune.com
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