Tesla close to producing 1 million electric cars a year as Texas factory nears completion


Tesla Inc broke ground on Monday on a lithium refinery in Texas that Chief Executive Elon Musk said would produce enough battery metal to make about 1 million electric vehicles (EVs) by 2025 North America’s largest lithium refinery. The plant would move Tesla away from its core focus of making cars and into the complex refining and processing of lithium, a step Musk said was necessary if the auto giant was to meet its ambitious electric vehicle sales goals.

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May 9, 2023 at 07:42 am

Tesla Chief Executive Elon Musk was seen speaking at an event at the electric carmaker’s Texas Gigafactory, which will build Cybertrucks and other electric vehicles.

“Looking ahead to the next few years, a fundamental bottleneck in the development of electric vehicles is the availability of battery-grade lithium,” Musk said during Monday’s groundbreaking ceremony, with bulldozers and other earth-moving equipment running in the background.

Musk said Tesla aims to finish building the factory next year and start full production about a year later.

The move would make Tesla the only major North American automaker to refine its own lithium. China currently dominates the processing of many key minerals, including lithium.

“The state of Texas wants to be self-reliant and not dependent on any foreign hostile state for our needs. We need lithium,” Texas Gov. Greg Abbott said at the ceremony.

Musk did not specify how much lithium the plant processes each year, but said the automaker would continue to buy the metal from its suppliers, which include Albemarle and Livent.

“We intend to continue to use lithium suppliers, so Tesla won’t do everything,” Musk said.

Albemarle plans to build a lithium processing plant in South Carolina that will refine 100,000 tons of the metal a year, with construction scheduled to start next year and the facility coming online later this decade.

Musk did not say where Tesla would source the rough ore of spodumene concentrate, which will be processed at the plant, despite Tesla’s supply deals with Piedmont Lithium Inc and others.

“cleaning operation”

Tesla said it would eschew the lithium industry’s traditional refining process, which relies on sulfuric acid and other strong chemicals, in favor of less environmentally harsh materials such as soda ash.

“You can live in the middle of the refinery and not experience any ill effects. So they are very clean operations,” Musk said, despite local media reports that some environmental advocates have raised concerns about the facility.

Monday’s announcement isn’t Tesla’s first foray into lithium production. Musk told shareholders in 2020 that Tesla had secured access to 10,000 acres of land in Nevada with the goal of producing lithium from clay deposits, never before done on a commercial scale.

While Musk has boasted that the company has developed a proprietary process to sustainably produce lithium from clay deposits in Nevada, Tesla has yet to deploy the process.

Musk urged entrepreneurs to get into the lithium refining business, saying it would be like “minting coins.”

“We beg you. We don’t want to do this. Can someone?” he said on a conference call last month.

Tesla said last month that a recent plunge in lithium and other commodity prices would help Tesla’s profit margins in the second half of the year.

The refinery is the latest expansion into Texas after Tesla moved its headquarters from California to Texas in 2021. Musk’s other companies, including SpaceX and The Boring Company, also operate in Texas.

“We’re proud that he calls Texas home,” Abbott said, calling Tesla and Musk “the economic titans of Texas.”

First published date: May 9, 2023 at 07:42 AM CST


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