Musk Confirms Tesla’s Plans to Build Lithium Refinery in Texas

SpaceX owner and Tesla CEO Elon Musk speaks during a conversation with legendary game designer Todd Howard (not pictured) at the E3 gaming convention in Los Angeles on June 13, 2019. Mike Blake/Reuters

Tesla CEO Elon Musk has confirmed that the company is pressing ahead with plans to build a lithium refinery in Texas to boost domestic production of the key commodity used in electric vehicle batteries.

Musk made the remarks during a Tesla earnings call on Oct. 19, during which he called battery-grade lithium “crazy expensive” and called for an expedited permitting process for mines of commodities that he said are “critical to a sustainable energy future.”

“The suggestion that we have is that there should be an expedited permitting process for anything which is critical to a sustainable energy future. So, it doesn’t make sense to put like a coal mine and a sustainable energy battery like lithium mine in the same category,” Musk said.

“And by the way, you can extract lithium with almost no disturbance to the local environment. So, it’s not actually an ugly, nasty mine situation,” he added.

The Tesla chief then confirmed plans to build a lithium refinery near Corpus Christi, Texas.

Lithium batteries displayed in the workshop of a lithium battery manufacturing company in Huaibei, eastern China's Anhui Province, on Nov. 14, 2020. STR/AFP via Getty Images

For months, Tesla had been weighing the lithium refinery project in a bid to secure the supply of the precious material used to make electric car batteries. China is currently the biggest processor and exporter of lithium.

Tesla filed an application with the Texas Comptroller’s Office on Aug. 22 (pdf), describing the lithium refinery as the first of its kind in North America.

If Texas authorities approve the proposal, construction could begin in the fourth quarter of this year, with the plant coming into full operation by the end of 2024.

Tesla has also said it was planning the development of more facilities in the United States to expand its battery materials processing, refining, manufacturing, and ancillary manufacturing operations to support its manufacturing base.

The Biden administration has been encouraging battery makers to move production back to the United States. It has also implemented stricter regulations and tightened tax credit eligibility in a recently passed bill to counter China’s dominance in this area.

Lithium prices have skyrocketed this year after surging demand from the auto sector and supply chain issues from lockdowns in China, which have left automakers scrambling to sign deals with alternative mining companies and refiners.

Bryan Jung contributed to this report.