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Tesla Begins Construction of Lithium Refinery in US

published: 2023-05-15 9:30

In April of last year, Tesla’s CEO Elon Musk announced via an online post that his company was planning to make a full-scale entry into mining and refining lithium. Now, over a year later, Tesla has started to take concrete steps towards this goal. On May 8 of this year, Elon Musk held a groundbreaking ceremony for a new lithium refinery in Corpus Christi, Texas. Among the attendees of the event was Texas Governor Greg Abbott.

The planned investment in the new lithium refinery is around USD 375 million (RMB 2.595 billion). The refinery will mainly output lithium materials that will be used in the manufacturing of EV power batteries. According to the development schedule for the refinery, the construction phase will end in 2024, and the refinery will be able to meet the demand from 1 million EVs per year by 2025. The projected maximum output from this refinery is greater than the combined total output from the other existing lithium refineries in North America. Furthermore, the refinery will a guarantee a sufficient supply of lithium hydroxide for Tesla’s battery manufacturing operations in the US. Besides lithium materials, the refinery may also be used for outputting intermediate materials and extracting metals from battery wastes.

Tesla submitted the documents for the refinery to the state government of Texas in September of last year. According to these documents, the company will use the refinery to manufacture battery-grade lithium hydroxide. Also, with the refinery, Tesla will become the only North American carmaker that can produce lithium materials in-house. Earlier in April of last year, Musk said Tesla may have to enter the field of refining lithium because the cost of this metal has reached an astronomical height. Musk also said the supply of lithium is a factor that constrain Tesla from raising vehicle production. Therefore, refining lithium has become a top priority for the company.

This is not the first time that Musk has raised the idea of Tesla getting involved in lithium mining and refining. In 2020, Tesla considered acquiring a mining company in order to harvest lithium ores. However, this proposal did not pan out. Later, Musk announced that Tesla will be building its own lithium ore refineries. Furthermore, Tesla eventually succeed in obtaining lithium mining rights in Nevada.

Besides setting up its own lithium mining and refining operations, Tesla has also signed a lithium ore contract with Australia’s Piedmont Through its mines in North Carolina, US, Piedmont Lithium will supply Tesla with high-purity lithium ores. The initial term of the agreement is set for 5 years.

This article is a translation of a Chinese article posted by TrendForce. It contains information that is either sourced from other news outlets or accessible in the public domain. Some Chinese names are transcribed into English using Hanyu Pinyin.

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