Tesla launches the 1st large-scale lithium refinery in the US

Tesla has officially started operations at its new lithium refining factory in Texas, coming over a year after the company first broke ground on the site.

This investment is critical to our mission to accelerate the world’s transition to sustainable energy and represents our efforts to aggressively increase the supply of battery-grade lithium hydroxide available in North America,” the company writes. Upon reaching volume production, the lithium refinery is expected to produce around 50 GWh of battery-grade lithium annually.

My Take

Tesla has a long term plan to ensure the raw materials supply chain is not over-reliant on one country. Lithium is the most expensive raw materials in making EV and currently three countries—Australia, Chile, and China—accounted for 88% of lithium production in 2023.

Supply of raw materials may be cut off due to deteriorating geopolitical tension. A week ago, China banned exports to the US of the critical minerals gallium, germanium and antimony that have widespread military applications, escalating trade tensions the day after Washington's latest crackdown on China's chip sector.

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