Tesla officially broke ground Monday on a lithium refinery in Texas, making it 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, making 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 reach its 2023 sales goal of around 1.8 million cars worldwide.
Lithium is the key critical material in the lithium-ion batteries that are driving the electric car revolution. Today, the US produces only 1% of the world’s lithium, with Australia, Chile and China leading the way. The Biden administration’s EV tax credit aims to encourage more domestic battery material sourcing and production and reduce US reliance on China, which hosts 60% of the world’s lithium refining capacity and nearly 80% of lithium-ion batteries. production capacity in the world.
“As we look ahead in a few years, a fundamental point of penetration in the development of electric vehicles is the availability of lithium grade batteries,” said Musk, during the ground -breaking ceremony outside of Corpus Christi.
The CEO drove to the event in a Cybertruck complete with a roof rack accessory that caught the attention of industry watchers. Government officials such as Texas Governor Greg Abbott, Nueces County Judge Connie Scott and Deputy Assistant Secretary of the US Dept. of Energy Kathleen Hogan attended the event.
Musk said the company aims to finish building the refinery next year, with full production slated for 2025. The executive described the timeline as “much faster by normal standards.” That may be true, but it’s slower than Tesla originally planned. During Tesla’s Investor Day in March, Drew Baglino, senior vice president of powertrain and energy engineering, said the company aims to have the refinery operational by the end of this year and begin production early next year.
Baglino also said at the time that the refinery would have 50 gigawatt-hours of annual capacity, something Musk did not confirm at Monday’s event.
During Investor Day, Musk also encouraged other startups to get involved in lithium refining, which he likened to “minting money.”
“We’re doing it because we have to, not because we want to,” Musk once said.
Tesla will invest $375 million to build the facility, according to filings with the Texas Comptroller. The refinery is Tesla’s latest expansion into Texas, which began when the company moved its headquarters to the state from California in 2021. The automaker invested nearly $6 billion in the Austin gigafactory last year. In January, Tesla said it planned to invest $770 million to expand the factory to include cathode and drive unit manufacturing and a battery cell testing site.