Tesla Inc. on May 8 broke ground on its new lithium refinery in Corpus Christi, Texas, which CEO Elon Musk said should produce enough battery-grade metal to build 1 million electric vehicles by 2025.
The move would make Tesla the only major car manufacturer in North America that will refine its own lithium.
The facility will push Tesla outside its core focus of building cars and into the complex area of lithium refining and processing, a step Musk said was necessary if the auto giant was to meet its ambitious electric vehicle (EV) sales targets.
“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.
Musk said Tesla aimed to finish construction of the factory next year and then reach full production about a year later.
Currently, China dominates the processing of many critical minerals, including lithium.
“Texas wants to be able to be self-reliant, not dependent upon any foreign hostile nation for what we need. We need lithium,” Texas Gov. Greg Abbott said at the ceremony.
Musk did not specify the volume of lithium the facility would process each year. However, he said the automaker would continue to buy the metal from its vendors, which include Albemarle and Livent.
“We intend to continue to use suppliers of lithium, so it’s not that Tesla will do all of it,” Musk said.
Albemarle plans to build a lithium processing facility in South Carolina that will refine around 110,000 tons of the metal each year, with construction slated to begin next year and the facility coming online later this decade.
Clean Operations
Tesla said it would forgo the lithium industry’s conventional refining process, which relies on sulfuric acid and other strong chemicals, in favor of materials that were less harsh on the environment, such as soda ash.“You could live right in the middle of the refinery and not suffer any ill effect. So they’re very clean operations,” Musk said.
Monday’s announcement was not the first time Tesla has attempted to venture into lithium production. Musk in 2020 told shareholders that Tesla had secured rights to 10,000 acres in Nevada where it aimed to produce lithium from clay deposits, which had never been done before at a commercial scale.
While Musk boasted that the company had developed a proprietary process to sustainably produce lithium from those Nevada clay deposits, Tesla has not yet deployed the process.
Musk has urged entrepreneurs to enter the lithium refining business, saying it is like “minting money.”
Tesla said last month a recent plunge in prices of lithium and other commodities would aid Tesla’s bruised margins in the second half of the year.
The refinery is the latest expansion by Tesla into Texas after the company moved its headquarters there from California in 2021. Musk’s other companies, including SpaceX and The Boring Company, also have operations in Texas.
Last year, Musk tweeted that Tesla may get into the lithium mining and refining business directly due to the high cost of the metal element. He also said that the availability of battery-grade lithium was a “fundamental chokepoint” for the EV industry and other sectors.
