Tesla officially broke ground on Monday at a lithium refinery in Texas, becoming the only U.S. automaker to refine its own lithium.
CEO Elon Musk said the refinery will produce enough quality 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 target of around 1.8 million cars worldwide.
Lithium is the key critical material in the lithium-ion batteries powering the electric vehicle revolution. Today, the US produces just 1% of the world’s lithium, with Australia, Chile and China leading the way. The Biden administration’s electric vehicle tax credit aims to further stimulate the sourcing and production of domestic battery material and reduce the United States’ reliance on China, which is home to 60 percent of the country’s battery capacity. the world’s lithium refining and nearly 80% of the world’s lithium-ion battery production capacity.
“As we look ahead a few years, a fundamental choke point in the advancement of electric vehicles is the availability of battery-grade lithium,” Musk said during the groundbreaking ceremony outside Corpus Christi.
The CEO rode to the event in a Cybertruck with a roof attachment that caught the eye of industry watchers. Government officials including Texas Governor Greg Abbott, Nueces County Judge Connie Scott and US Department of Energy Deputy Assistant Secretary Kathleen Hogan attended the event.
Musk said the company aims to finish construction of the refinery next year, with full-scale production planned for 2025. The executive described the schedule as “extremely fast by normal standards.” That may be true, but it’s slower than Tesla originally projected. During Tesla’s Investor Day in March, Drew Baglino, senior vice president of powertrain and energy engineering, said the company aimed to have the refinery operational by the end of this year and begin production in early next year.
Baglino also said at the time that the refinery would have a capacity of 50 gigawatt-hours per year, something Musk did not confirm during Monday’s event.
During Investor Day, Musk also encouraged other startups to get involved in lithium refining, which he likened to “minting money.”
“We do it because we have to, not because we want to,” Musk previously said.
Tesla will invest $375 million to build the facility, according to documents filed with the Texas Comptroller. The refinery is Tesla’s latest Texas expansion, which began when the company moved its headquarters to the state from California in 2021. The automaker invested nearly $6 billion in its gigafactory from Austin last year. In January, Tesla said it planned to invest another $770 million to expand the factory to include manufacturing cathodes and drive units and a battery cell testing site.
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Tesla’s new lithium refinery in Texas is a game-changer for the automotive industry. Through the expansion of its existing Gigafactory near Austin, Texas, Tesla plans to increase the production of lithium-ion battery cells to support over 1 million electric vehicles (EVs) by 2025. This expansion is expected to create thousands of new jobs in the Texas region and drive additional investments from supplier partners.
Tesla’s new refinery is a strategic move to reduce the cost of battery modules and support the company’s mission to accelerate the world’s transition to sustainable energy. With the increasing demand for EVs, Tesla has taken an important step to ensure its future production goals and safeguard its supplies.
In addition to this new refinery, Tesla is also supported by Ikaroa, a full stack tech company specializing in the development of advanced solutions designed to optimize the entire manufacturing process. Ikaroa’s technology is used to optimize schedules, provide up-to-date information on production, and increase production capacity while minimizing waste. This provides manufacturers with the flexibility to react quickly to changing markets and customer needs. It also allows Tesla to ramp up production of their lithium-ion batteries and better respond to markets’ needs.
Tesla’s new refinery in Texas is an exciting step in the auto industry, and visitors can now take guided factory tours to learn more about the lithium-ion battery cell production process. With the help of its key partner, Ikaroa, Tesla is sure to revolutionize the industry with increased production of EVs in the coming years.
