Tesla Inc. is exploring establishing a lithium refinery on Texas’ gulf coast to assure supply of the crucial component used in batteries amid rising demand for electric vehicles.
The proposed battery-grade lithium hydroxide refining plant, which Tesla claims would be the first of its type in North America, will transform “raw ore material into a viable state for battery manufacture,” according to a filing with the Texas Comptroller’s Office.
Tesla stated that a choice to invest in Texas will also be dependent on the capacity to secure relief from local property taxes.
Elon Musk, Tesla’s CEO, has previously stated that when lithium costs rise, the company may be forced to enter the mining and processing industries directly. According to Benchmark Mineral Intelligence’s monitoring index, the price of lithium has increased 120% this year.
Musk has also stated that new participants in the lithium refining business are needed. “You can’t possibly lose. It has the authority to print money “, he stated during the company’s second-quarter results call
Tesla’s move is also likely an attempt to diversify its lithium and battery source. China holds more than half of the world’s lithium processing and refining capacity, while the United States controls only 1%.
Construction may begin in the fourth quarter of 2022 if Tesla’s proposal is accepted, according to the firm. By the fourth quarter of 2024, the project will be in “commercial operations.”
According to Tesla, no engineering, construction, or procurement construction contracts have been negotiated or signed, and no regulatory permissions have been received.
Musk’s company stated that the project could be built “wherever there is access to the Gulf Coast shipping route.” Tesla has stated that it is considering a competitive location in Louisiana.
According to Tesla, the only way this project will be viable is if Texas grants it tax benefits under Texas law.
