Tesla Announces Plans to Build Lithium Refinery in Texas

Tesla has committed to build a lithium refinery in Texas. The new facility, will be near Corpus Christi, possibly in or around Robstown. The company had floated the idea of building a refinery to safeguard its supply chain on the Gulf Coast last month, but now its CEO, Elon Musk has confirmed in an analysts meeting that Tesla will go ahead with the project. It will be the first lithium refinery in the US, and construction could possibly begin before the end of this year. Tesla has already held one meeting with state regulators to put forward its plans to construct the battery-grade lithium hydroxide refinery, which will process raw ore into the elements required for battery production.

As more and more electric vehicles are produced, demand for lithium has never been higher. There is currently a shortage of lithium being mined, and new extraction sites are in various stages of completion. This includes ones in the US itself where there is currently one operating mine in Nevada, but several planned in California, Arkansas, North Carolina and more in Nevada. The lithium extracted by those mines will have to be refined before use. Some of the urgency is due to the current US government implementing a strategy that encourages the full lithium supply chain to be located in the country. The strategy includes basing discounts for EVs on the percentage of the battery supply chain that is situated in the US. It is thought that none of the vehicles currently sold in the country would qualify for the full discount as it stands at the moment. Those regulations are designed to get tougher each year until 2030, when the discount will only apply to batteries with a 100% US-based supply chain. Tesla’s newly announced plans for a refinery bring another branch of the supply chain into the US.

It is a bold move by Musk and Tesla, but as we have seen in the period since the pandemic, companies are making these moves on a regular basis to ensure that they are in the best position possible in case of any other supply chain disruptions. Many of these disruptions are extreme weather events that are happening due to climate change. Ironically, over the last few years, Texas has often been on the receiving end of those events.