US electric vehicle maker Tesla plans to build a lithium refinery in the Gulf Coast region of Texas and is seeking tax breaks to complete the project. In an application package sent to the Texas Comptroller of Public Accounts at the end of August and made public on Friday, Tesla says it wants to “process raw ore and make it usable for the production of batteries“.
The finished product, battery-grade lithium hydroxide, will be shipped by road and rail to various Tesla battery manufacturing sites in the United States. If it sees the light of day, this factory will be, according to Tesla, the first of its kind in North America. Its construction could begin in the last quarter of 2022 and commercial activity will start there from the end of 2024.
Unknown potential cost
The group led by Elon Musk, however, specifies that “it assesses the feasibility of the project“, which is currently at a preliminary stage, no construction or engineering contract having been negotiated and no permit having been granted. Tesla is also studying the possibility of building a similar site in the state of Louisiana as an alternative.
The potential cost of the project has not been quantified, but the automaker indicated that an essential condition for its realization consists of the granting of tax advantages by Texas, in particular “the possibility of obtaining relief on local property taxes“.
Tesla’s project comes amid soaring lithium prices due to strong demand for this material, essential for making electric batteries. In April, Mr. Musk tweeted that Tesla would “may have to jump right into large-scale mining and refining unless prices improve“. China, Australia, Chile and Argentina, where the world’s largest lithium resources are located, dominate the market for the production and exploitation of this highly coveted mineral.