Elon Musk says entrepreneurs are missing out on ‘huge’ opportunities in heavy industry

The Tesla CEO made the comments while speaking with Ford CEO Jim Farley on Twitter Spaces. event Thursday night. The two announced that Tesla’s charging stations will be available to Ford EV owners (much to the chagrin of Tesla customers who already face long wait times).

At one point in the conversation, Farley asked Musk about his experience processing raw materials near Corpus Christi, Texas, where Tesla broke ground on a lithium refinery earlier this month.

Lithium hydroxide, which the facility will package and ship, is a central component in electric vehicle batteries but is in short supply in the national supply. Musk said Thursday that there is plenty of lithium around the world, but that Tesla has identified a “significant choke point” in its processing. It’s something Tesla would rather not do himself, he added, but he is forced to do it.

“Our real goal is to do as few as possible, but then we end up hitting these choke points, or we anticipate hitting the choke points,” he said. “So a lot of vertical integration is really out of necessity.”

Musk said Tesla would gladly use suppliers if they were “solving the problem” and if they could clearly continue to meet the automaker’s production needs, which could then redirect resources elsewhere.

Tesla has also been building a facility at its Texas gigafactory to produce cathodes, another key part of EV batteries.

‘Overallocation of talent’

Musk said he wants more businessmen to get involved in heavy industry.

“I see so many entrepreneurs in Silicon Valley doing a software startup or chasing the latest thing. But there is not enough talent in North America for heavy industry,” he said. “And the crazy thing is that the opportunity in heavy industry is tremendous. So I’d 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 them, but, you know, I think we have an over-allocation of talent toward apps on the phones.”

Venture capitalist Paul Graham, co-founder of startup accelerator Y Combinator, commented on the “preponderance of software companies” last month, tweeting, “Doing physical things is hard. But don’t let that put you off, if that’s what interests you.

Musk answered“There is not enough talent in manufacturing and heavy industries.”

As it turns out, one manufacturing-focused entrepreneur for the EV space was one of Tesla’s earliest 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, with nearly a third coming from China.

“I strongly believed that all ground transportation would be electric and that 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 is trying to find out: “Do we need to do the anode too? I hope not. If anyone else could do that, that would be awesome. Synthetic graphite, there’s a big market for it.” He recommended businessmen look to supply it.