Featured Image Credit: SAUL LOEB / Contributor / Getty
The fortunes of the world's richest man could soon be about to change again, and while Elon Musk is sitting relatively pretty on his $408.5 billion fortune, we've seen his wealth go on a roller coaster in 2025.
While Elon Musk originally profited in the aftermath of President Donald Trump’s return to the White House, his instigation of the Department of Government Efficiency saw him face plenty of backlash. In particular, Tesla was hit hard amid boycotts, protests, and record-breaking profit dips.
If that wasn't enough to contend with, there was his spectacular falling out with the POTUS over the One Big Beautiful Bill Act and allegations that Musk threw his toys out of the pram over the removal of the EV mandate.
They say bad things come in threes, and as well as having all of this to contend with, Trump's trade tariffs threaten to hobble Tesla's manufacturing, which largely takes place in China's Tesla Gigafactory 3.
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Musk seems to be fighting an uphill battle when it comes to getting Tesla back on an even road surface, but while he's been celebrating the success of his long-awaited robotaxi and trying to diversify the portfolio with his Optimus robots, Tesla could now be in trouble thanks to a shortage of lithium.
Although it originally looked like Musk could reap the benefits of a $1.5 trillion lithium discovery in a former supervolcano, there are concerns about China's ability to secure the lithium supply chain.
We already reported on how Musk faced a crossroads when it comes to Tesla's ties to China in terms of lithium, but in a 2023 study published in ScienceDirect, there were warnings that "as the world's largest consumer of lithium resources, China faces a substantial demand-supply gap and challenges in securing its lithium supply chain."
Despite competition from the likes of Australia in terms of lithium mining and refining, China remains the leading power in refining the majority of the world's battery‑grade lithium. This means environmental crackdowns or regulatory probes could seriously disrupt the global supply chain.
A 2024 article from Mining.com claimed that China is oversupplying lithium to try and push out its US rivals. Jose Fernandez, under secretary for economic growth, alleged: "They [China] engage in predatory pricing… [they] lower the price until competition disappears. That is what is happening."
🚨BREAKING: PIPER SANDLER SAYS — TESLA UNIQUELY SOURCES BATTERIES AT SCALE WITHOUT CHINESE RELIANCE $TSLA
— Tesla Archive (@tesla_archive) June 3, 2025
• Tesla is the only carmaker avoiding China for large-scale battery production
• Plans to produce cathode materials, refine lithium, and build anodes
• Will coat… pic.twitter.com/COtg1aD4O6
This has been accompanied by China's enforced import controls, that are said to be protecting domestic innovation and helping the country keep its competitive advantage in the EV market.
As seen with Australia, many lithium facilities are holding back until prices steady, which is already heightening fears of potential bottlenecks and the cost of electric vehicles climbing.
Tesla has a vertically integrated model of mining, refining, and cell assembly that heavily relies on upstream suppliers playing ball and puts a lot of power in China's hands.
Considering Tesla sources 40% of its battery material from Chinese refiners like Ganfeng, Yahua, and CATL (the latter producing 37% of the world's EV and ESS), even the smallest disruption in the lithium chain could have a butterfly effect.
We've already seen Musk make some moves to try and sever Tesla's dependence on China, and as well as a $4.3 billion deal with LG Energy Solution to source lithium iron phosphate batteries from Michigan, Tesla's Texas lithium refinery is targeting an annual 50 GWh. Still, with China arguably having the winning hand right now, it remains to be seen whether Musk will fold or raise.
