Tesla Seeks Tax Breaks for ‘First-of-Its-Kind’ Lithium Refinery | Company


SEAN O’KANE AND SHELLY HAGAN Bloomberg News

Tesla Inc. is preparing a potential lithium refinery on the Gulf Coast of Texas, a move that would bolster the company’s battery production efforts and further expand its footprint in the state.

The electric car maker told officials it plans to build a “battery-grade lithium hydroxide refining facility” in Nueces County, according to a new public request for tax relief filed with the comptroller’s office. from Texas. Tesla billed it as “the first of its kind in North America”.

If built, Tesla told the state the facility would process raw ore into a state suitable for battery production. The resulting lithium hydroxide he creates would be “packaged and shipped by truck and rail to various Tesla battery manufacturing sites supporting the supply chain needed for large-scale and electric vehicle batteries.”

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Tesla also said the process it will use is “innovative and designed to consume fewer hazardous reagents and create usable byproducts compared to the conventional process.”

Construction could begin as early as the fourth quarter of 2022, but would not reach commercial production until the fourth quarter of 2024. Tesla told the state that the facility could be located “anywhere with channel access Gulf Coast Navigation”, but that the company is evaluating a competing site in Louisiana.

Tesla did not respond to a request for comment.

Chief executive Elon Musk has spent much of the last year campaigning for rapid development of lithium mining in North America, likening the opportunity to the big margins typically made in the software industry.

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

While merchant refiner profitability rose earlier this year in part due to demand for electric vehicles, margins have fallen significantly from the March peak as companies are squeezed by rising commodity prices.

Dozens of plans are underway to add similar plants in other countries, including developments in Germany and Australia, which began production at a first refinery earlier this year. Albemarle Corp., the world’s largest lithium producer, plans to build a new processing site in the southeastern United States

China currently dominates lithium refining and has more than half the world’s capacity to process raw materials harvested from mines or salt-rich underground brines into specialty chemicals used in electric vehicle batteries.

A lithium mining facility would be just the latest addition to Musk’s growing Texas empire. Beyond the new Austin auto plant that began production this year, Musk has built a massive prototyping and rocket-launch facility in Boca Chica, Texas. His tunneling team, The Boring Company, also pursues many projects across the state.

Tesla has already applied for permits to manufacture similar battery materials next to its Austin plant, although the current status of the project is unclear.

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