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Tesla Motors Inc (NASDAQ:TSLA) Musk Massages Lithium Consternation

Elon Musk Tesla Motors Inc (TSLA) and SolarCity Corp (SCTY)

Tesla Motors Inc  is having a buoyant week by all accounts. After showing off never-before-seen parts of the Model X on Tuesday, Elon Musk went on to confirm the launch date of the car and the reveal date for the Model 3 on Wednesday. Avid Tesla Motors fans will be watching for more info on Thursday, but they may have missed a brewing storm in one of Wednesday’s tweets from Musk.

Elon Musk Tesla Motors Inc earnings

In response to a piece tweeted by Scott Lucas of the Las Vegas Sun, Mr. Musk said “Lithium deal is not exclusive & has many contingencies. The press on this matter is unwarranted.” The Las Vegas Sun had posted a piece about the Tesla Motors deal with a Mexican Lithium project to supply the Gigafactory with Lithium.

Lithium deal hurts Nevada prospect

The piece, which was authored by Daniel Rothberg, asked whether Tesla had misrepresented itself when pitching its power cell plant to Nevada. Tesla Motors  obtained more than $1B in tax breaks to persuade it to put the Gigafactory in Nevada.

Democrat Tick Segerblom was quick to come out with dissent on news of the Mexico deal. He tweeted, “Tesla to get lithium from Mexico – where’s Trump when we need him?”.

Mr. Segerblom said that he was expecting the Gigafactory to boost lithium business in Nevada. “In hindsight”, he said “whether that was something we created or whether they misled us, I honestly can’t say. It shows you can get excited in the moment about what’s going to occur without ever actually questioning: ‘Are you intending to use Nevada lithium?’”

When asked by the Las Vegas Sun’s Politics Editor Scott Lucas whether he planned on looking at sources of the metal in Nevada, Mr. Musk said “Definitely.”

Politics get in Tesla Motors way

Tesla Motors , despite its tech, has had to get down and dirty in the realm of politics in order to further its goals.

The lithium problem, which Mr. Musk will likely need to solve in order to come to fruitful terms with the State’s lawmakers in future, is the latest political barrier that the firm faces, but it won’t be the last.

Tesla Motors, like many other firms, relies on the good grace of the State in order to do its work. The Model S and Model X likely wouldn’t exist without the healthy subsidies of a willing state, and the firm’s goal of pushing down the price of batteries is furthered by the payout from Nevada for the Gigafactory.

The firm doesn’t only rely on state money, it also relies on lawmakers to make changes to rules which hurt its prospects. The most famous in recent years has been the battle to allow direct sales in a number of states.

Elon Musk, and the rest of the Tesla Motors team, need to ensure they don’t create any bad feeling among those that will control the future of the Gigafactory.

As in all things Tesla Motors could perhaps do with better communication on its sourcing of lithium. That could iron out some of the problems caused with the unclear message on the metal this week.

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