Tesla Breaks New Ground with Texas Lithium Refinery
Tesla has officially begun construction on a groundbreaking lithium refinery in Texas, becoming the first American automaker to refine its own lithium. By 2025, CEO Elon Musk anticipates that the refinery will generate enough battery-grade lithium to power one million electric vehicles, positioning Tesla as the largest lithium processor in North America. While striving towards its 2023 sales target of approximately 1.8 million cars globally, Tesla will continue to collaborate with existing suppliers such as Albermarle and Livent.
Lithium serves as an essential component within lithium-ion batteries that fuel the electric vehicle (EV) movement. The US currently produces a meager 1% of the world’s lithium supply, lagging behind countries like Australia, Chile, and China. As a part of President Biden’s EV tax credit initiative, the US aims to develop its domestic battery material production and decrease its dependency on China, which holds 60% of the world’s lithium refining capacity and almost 80% of the global lithium-ion battery production capacity.
Musk underscored the significance of battery-grade lithium availability to the progression of EVs during the groundbreaking ceremony near Corpus Christi. Numerous government officials attended the event, including Texas Governor Greg Abbott, Nueces County Judge Connie Scott, and U.S. Department of Energy Deputy Assistant Secretary Kathleen Hogan. Musk arrived in a Cybertruck equipped with an eye-catching roof rack accessory.
Tesla plans to complete the construction of the refinery in 2023 and initiate full-scale production in 2025. Musk referred to the timeline as “extremely fast by normal standards.” However, it diverges from Tesla’s initial projections announced during an Investor Day in March. Senior Vice President of Powertrain and Energy Engineering, Drew Baglino, had previously stated that the refinery would be operational by the end of 2023 and that production would commence early in 2024.
At that time, Baglino also mentioned the refinery would have a 50-gigawatt-hour per year capacity, a detail Musk did not address during the recent event. In addition, Musk encouraged other startups to partake in lithium refining, comparing the activity to “minting money” and stressing that Tesla was pursuing it out of necessity rather than desire.
Tesla has dedicated $375 million towards constructing the facility, as stated in filings with the Texas Comptroller. The refinery supports Tesla’s ongoing expansion in Texas, which kicked off when the company relocated its headquarters from California in 2021. Last year, Tesla invested nearly $6 billion in its Austin gigafactory and recently announced plans to allocate an additional $770 million towards expanding the facility to encompass cathode and drive unit manufacturing, as well as a battery cell testing site.
