220629 Tesla
Tesla has previously applied for permits to make similar battery materials adjacent to its Austin factory, though the current status of the project is unclear. Image Credit: Reuters

California: Tesla is plotting a potential lithium refinery on the gulf coast of Texas.

The electric-car maker has told the state it is considering constructing a ‘battery-grade lithium hydroxide refining facility,’ in Nueces County, which it has pitched as ‘the first of its kind in North America,’ according to a newly-public application for tax breaks filed with the Texas Comptroller’s Office.

If built, Tesla has told the state that the facility would process raw ore material into a usable state for battery production and that the resulting lithium hydroxide it creates would be packaged and shipped by truck and rail to various Tesla battery manufacturing sites supporting the necessary supply chain for large-scale and electric vehicle batteries.

Tesla also said the process it will use is innovative and designed to consume less hazardous reagents and create usable by-products compared to the conventional process.

Construction could begin as soon as the fourth quarter of 2022, but wouldn’t reach commercial production until the fourth quarter of 2024. Tesla has told the state that the facility could be located “anywhere with access to the Gulf Coast shipping channel,” but that the company is evaluating a competing site in Louisiana.

Tesla didn’t immediately respond to a request for comment.

Lithium ambitions

Tesla’s CEO Musk has spent much of the last year agitating for rapid development in lithium mining in North America, comparing the opportunity to the fat margins typically made in the software industry.

“I’d like to once again urge entrepreneurs to enter the lithium refining business. The mining is relatively easy, the refining is much harder,” Musk said on Tesla’s second-quarter earnings call in July. “You can’t lose, it’s a license to print money.”

Dozens of projects are underway to add similar plants in other nations, including developments in Germany and Australia, which began production at a first refinery earlier this year. Albemarle, the world’s top lithium producer, is planning to build a new processing site in the southeastern US.

China currently dominates lithium refining and has more than half of global capacity to process raw materials harvested at mines or from salt-rich underground brines into the specialist chemicals used in EV batteries.

A lithium mining facility would be just the latest addition to Musk’s growing Texas empire. Beyond the new automotive factory in Austin that started production this year, Musk has built out a massive rocket prototyping and launch facility in Boca Chica, Texas. His tunneling outfit, The Boring Company, is also pursuing numerous projects across the state.