Tesla officially broke ground on a lithium refinery in Texas on Monday, becoming the only US automaker to refine its own lithium.
CEO Elon Musk said the refinery will produce enough battery-grade lithium for 1 million electric vehicles by 2025, which would make Tesla the largest lithium processor in North America. Tesla will continue to rely on existing suppliers such as Albermarle and Livent as it aims to hit its 2023 sales target of around 1.8 million cars worldwide.
Lithium is the key critical material in the lithium-ion batteries powering the electric vehicle revolution. Today, the US produces just 1% of the world’s lithium, with Australia, Chile and China leading the way. the Biden administration Electric Vehicle Tax Credit aims to stimulate greater sourcing and production of domestic battery material and reduce US dependence on China, which is home to 60% of the world’s lithium refining capacity and almost 80% of the world’s lithium-ion battery production capacity.
“Looking ahead a few years, a critical bottleneck in the advancement of electric vehicles is the availability of battery-grade lithium,” Musk said, during a groundbreaking ceremony outside Corpus Christi.
The CEO drove to the event in a Cybertruck complete with a luggage rack accessory that caught the attention of industry watchers. Government officials including Texas Governor Greg Abbott, Nueces County Judge Connie Scott, and US Department of Energy Deputy Assistant Secretary Kathleen Hogan attended the event.
Musk said the company aims to finish construction of the refinery next year, with full-scale production scheduled for 2025. The executive described the schedule as “extremely fast by normal standards.” That may be true, but it’s slower than Tesla had originally projected. During Tesla’s Investor Day in March, Drew Baglino, senior vice president of powertrain and power engineering, said the company aimed to have the refinery up and running by the end of this year and start production early next year.
Baglino also said at the time that the refinery would have a capacity of 50 gigawatt-hours per year, something Musk did not confirm during Monday’s event.
During Investor Day, Musk also encouraged other startups to get involved in lithium refining, which he likened to “minting money.”
“We do it because we have to, not because we want to,” Musk previously said.
Tesla will invest $375 million to build the facility, according to filings with the Texas Comptroller. The refinery is Tesla’s latest expansion in Texas, which began when the company moved its headquarters to the state from California in 2021. The automaker invested nearly $6 billion in its Austin gigafactory last year. In January, Tesla said it planned to invest another $770 million expand the factory to include cathode and drive unit manufacturing and a battery cell test site.
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