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Tesla Confirms Plans to Build Lithium Refinery in Texas

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Elon Musk | Image by REUTERS

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Tesla Inc. has confirmed that the company plans to build a lithium refinery along the Texas Gulf Coast.

Tesla CEO Elon Musk announced the move during a third-quarter earnings call following a question from an analyst about the company’s progress in developing its new 4680 battery cell technology.

“Yes. We’re also building a lithium refinery,” Musk said.

Tesla’s lithium refinery will be built in Corpus Christi in Nueces County, near the Gulf Coast shipping channel, according to another Tesla executive during the earnings call. Tesla plans to invest $375 million into the factory, which will package and ship battery-grade lithium hydroxide for Tesla’s new 4680 battery cell technology.

Lithium-ion batteries are used in most electric vehicles for their high energy output relative to other electrical energy storage systems, according to the U.S. Department of Energy.

Tesla’s lithium facility would be the first of its kind in North America, according to an application the company submitted to the Texas Comptroller’s Office earlier this year. The application highlighted Musk’s intention to use the future facility for alternative-battery materials processing, refining, manufacturing, and ancillary manufacturing operations to support Tesla’s sustainable product line to help the company stay competitive globally.

Lithium is “crazy expensive,” Musk said. Year-to-date, lithium prices have increased by 123.3%, according to current data by Benchmark Mineral Intelligence, a price reporting agency and specialist information provider.

Musk has encouraged other entrepreneurs to start recycling lithium as a way to lower the price of the raw material and ease supply bottlenecks.

Construction on the Texas-based refinery could begin during Q4 2022, with commercial operations targeted for the end of 2024, according to the application.

The project will potentially add 250 Texas jobs over the next two years of construction and another 162 permanent jobs once the factory is operational. Of these permanent jobs, 10 will pay $81,000/year with benefits, while the remaining positions will pay about $53,000/year and will not qualify for benefits, as reported by the Tesmanian, a Tesla-focused news publication.

Once operational, the refinery will process raw ore material into a usable state for battery production, then ship the lithium hydroxide to various Tesla battery manufacturing sites, supporting the necessary supply chain for large-scale and electric vehicle batteries.

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