The world’s largest manufacturer of electric vehicles, Tesla, is examining the viability of building a refinery for lithium hydroxide off the coast of Texas.
According to a recently published letter to the Texas Comptroller’s Office, Tesla stated that the factory would concentrate on the creation of “battery-grade lithium hydroxide” and be “the first of its kind in North America.”
According to the application, the business would transform “raw ore material into an usable state for battery production” and then transport lithium hydroxide to multiple Tesla battery production facilities.
Elon Musk, the CEO of Tesla, stated in April that the company could need to enter the lithium refining business because the price of the metal had “gone to insane levels.”
An index used for tracking lithium prices published by Benchmark Mineral Intelligence shows a 120% increase in price this year.
The action by Tesla is probably an attempt by the company to diversify the sources of the lithium and batteries it uses. The United States only controls 1% of the world’s processing and refining of lithium, while China controls more than half of it.
The business stated that it is also taking into consideration as part of its Texas application “other battery materials processing, refining and manufacturing and ancillary manufacturing operations in support of Tesla’s sustainable product line.”

Construction may start in the fourth quarter of 2022 if Tesla’s proposal is accepted, the company said. By the fourth quarter of 2024, the project will be in “commercial operations.”
Tesla stated that “only very preliminary development activities have begun” and that it is still “evaluating the feasibility of this project.”
According to Tesla, no contracts have been reached or signed for engineering, construction, or procurement, and no licenses have been received.
According to Musk’s company, the project may be situated “anywhere with access to the Gulf Coast shipping channel.” Tesla claimed that it is considering a rival site in Louisiana.
Tesla said that Texas’s law must grant them tax benefits in order for this project to be financially feasible.
“In the case of the investment on this proposed project in Texas, the decision will be based on a number of commercial and financial considerations, including the ability to obtain relief regarding local property taxes,” on the basis of the application.
For batteries used in everything from electric automobiles to cellphones, lithium is an essential element. Washington has been concerned that Beijing could cut off vital supply of lithium and other elements due to the strategic importance of such rare earth metals and China’s supremacy in their mining.
To catch up with China, the United States is trying to expand its own rare earth mining and refining sector.