Tesla formally began construction on a Texas lithium refinery on Monday, making it the first manufacturer in the United States to process its own lithium.
Elon Musk, Tesla’s CEO, stated that the refinery will generate enough battery quality lithium for 1 million electric vehicles by 2025, making Tesla the largest lithium processor in North America. Tesla will continue to rely on existing suppliers such as Albemarle and Livent as it strives to meet its worldwide sales goal of 1.8 million vehicles by 2023.
Lithium is a fundamental component in lithium-ion batteries, which fuel the electric car revolution. Currently, the United States produces just 1% of the world’s lithium, with Australia, Chile, and China leading the way. The EV tax credit proposed by the Biden administration attempts to increase American battery material sourcing and manufacturing while reducing the United States’ reliance on China, which has 60% of the world’s lithium refining capacity and almost 80% of the world’s lithium-ion battery production capacity.
“As we look ahead a few years, a fundamental choke point in the advancement of electric vehicles is the availability of battery grade lithium,” Musk said during the groundbreaking ceremony in Corpus Christi.
The CEO arrived at the event in a Cyber Truck outfitted with a roof rack addition, which drew the attention of industry observers. Texas Governor Greg Abbott, Nueces County Judge Connie Scott, and Deputy Assistant Secretary of Energy Kathleen Hogan were among those in attendance.
Musk stated that the business hopes to complete construction on the refinery next year, with full-scale production beginning in 2025. According to the CEO, the schedule was “extremely fast by normal standards.” That may be true, but it is slower than Tesla had predicted. Drew Baglino, senior vice president of powertrain and energy engineering at Tesla, stated during the company’s Investor Day in March that the refinery will be operational by the end of this year and start production early next year.
Baglino also stated at the time that the refinery will have a capacity of 50 gigatonnes per year, which Musk did not confirm during Monday’s event.
During Investor Day, Musk also urged other firms to get engaged in lithium refining, which he compared to “minting money.”
“We’re doing it because we have to, not because we want to,” Musk has explained.
According to documents with the Texas Comptroller, Tesla will invest $375 million in the project. The refinery is Tesla’s latest foray into Texas, which began when the firm relocated its headquarters from California to the state in 2021. Last year, the carmaker committed roughly $6 billion in its Austin gigafactory. Tesla said in January that it will invest a further $770 million to expand the factory to include cathode and drive unit production, as well as a battery cell testing facility.
