The lithium war is heating up and Tesla is set to make what could be a game-changing move within the year. The electric vehicle company is in the process of looking into the possibility of setting up its own lithium hydroxide refinery in Texas. If successful, Tesla will no longer have to rely on third-party producers to supply lithium for its batter manufacturing facilities.
The Tesla refinery stands to become the first of its kind in North America and will be used to transform raw lithium ore into a usable and stable form for EV battery cores. The refined material will then be shipped to Tesla manufacturing plants throughout the world.
In its application with the Texas Comptroller’s Office, Tesla officials stated that the refinery would also process other materials used in the battery-making process, as well as augment the company’s ancillary manufacturing operations in keeping with its emphasis on sustainable production practices.
Should Texas approve the application, building the facility could begin as early as the fourth quarter of this year. However, commercial operations may not commence until late 2024.
A Timely Decision
Tesla’s plan to put up its own lithium refinery comes at a time when the price of the said metal has soared to astronomical heights.
Indeed, company founder Elon Musk declared back in April that, as the cost of lithium was now at insane levels, the company would need to do their own refining activities in order to save on the cost of production. As of press time, the price of lithium for this year is already up by 120% from this time last year.
In the event that Tesla pushes through with its plan, it could shift the balance with regard to the global lithium supply. Right now, North America is responsible for only 1% of the total global production of lithium, while China controls more than half of it.
However, given strained economic and political relations between China and the rest of the world, governments are concerned that Beijing would not be above economic blackmail and cut off supplies of lithium and other vital materials from those it disagrees with. This would pose a serious issue as lithium batteries are now used in practically everything from electric vehicles to mobile devices. In which case, public and private initiatives in the United States and Canada are seeking ways by which to ramp up their own rare earth mining initiatives to even the score.