Tesla is evaluating the possibility of developing a battery-grade lithium hydroxide refining facility in North America. The company seems to be proactively looking to support its battery manufacturing efforts.
Bloomberg found documents suggesting that Tesla applied for tax breaks with the Texas Comptroller’s Office. The public documents show that Tesla isn’t just considering refining lithium hydroxide. Tesla is also looking into constructing facilities that support other battery materials processing, refining, and manufacturing, as well as ancillary manufacturing operations.
Tesla explained that its battery-grade lithium hydroxide refining facility would process raw ore material into a usable state for battery production. The company seems to have developed an innovative refining process that consumes less hazardous reagents than conventional methods.
Tesla is eyeing an area in Nueces County, Texas, for its lithium refining facility. If it chooses the site in TX, Tesla plans to begin construction on its refining facility in Q4 2022. The company forecasts that the facility will reach commercial operations by Q4 2024.
The EV manufacturer added that its lithium hydroxide refining facility could theoretically be located anywhere with access to the Gulf Coast shipping channel. However, as of this writing, it is looking at sites in Texas and Louisiana.
Elon Musk on Lithium
Elon Musk has urged young entrepreneurs to invest in the lithium business. During the Q1 2022 live Q&A webcast, Musk shared that lithium is responsible for “quite a bit of” cost growth in battery cells and therefore the “single biggest cost growth factor” for Tesla at the moment.
“We’re looking carefully at all of the raw materials and trying to figure out how we can accelerate the total amount of raw materials needed to transition the world to sustainability,” Musk said.
“So, we think we’re going to need to help the industry on this front, but the — I mean, the industry is very fast. And I certainly encourage entrepreneurs out there who are looking for opportunities to get into the lithium business. The lithium margins right now are practically software margins.”