Tesla is considering building a lithium refinery in the Gulf Coast region of Texas, as the company looks to secure supplies of the key raw material needed to make its electric vehicle batteries amid a surge in global demand for electric vehicles. Tesla said the decision to invest in Texas will also be based on the consideration of obtaining local property tax exemptions.
The potential battery-grade lithium hydroxide refinery would process, refine and manufacture raw materials for batteries, Tesla is understood to have said in its Aug. 22 application to the Texas Comptroller's Office.
Tesla CEO Elon Musk has previously tweeted publicly that Tesla may have to enter the mining and lithium refining industry directly on a large scale as the price of lithium metal soars.
If Tesla's regulatory permit application is approved, construction could begin in the fourth quarter of 2022, with the possibility of commercial production scale by the end of 2024.
Under the plan, final product would be transported from the refinery by truck and rail to multiple Tesla battery production sites that support a large electric vehicle battery supply chain, Tesla said.
According to media reports, in addition to Texas, Tesla is also evaluating a competing site in Louisiana, USA.
Tesla now faces a daunting challenge from the growing strength of its competitors, so it is critical to ensure a steady supply of its battery components. The company also faces the difficult task of significantly ramping up production in the second half of the year after the supply chain and the new crown epidemic affected car production.
Tesla delivered 254,695 vehicles in the second quarter, down 17.9 percent from the previous quarter, according to the data.