HomeBusinessTesla contemplating lithium refinery in Texas, seeks tax reduction By Reuters

Tesla contemplating lithium refinery in Texas, seeks tax reduction By Reuters

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© Reuters. The TESLA brand is seen outdoors a dealership within the Brooklyn borough of New York Metropolis, U.S., April 26, 2021. REUTERS/Shannon Stapleton

(Reuters) -Tesla Inc is contemplating organising a lithium refinery on the gulf coast of Texas, because it seems to be to safe provide of the important thing part utilized in batteries amid surging demand for electrical automobiles.

The potential battery-grade lithium hydroxide refining facility, which Tesla (NASDAQ:) touted as the primary of its variety in North America, will course of “uncooked ore materials right into a usable state for battery manufacturing”, the corporate mentioned in an software filed with the Texas Comptroller’s Workplace.

A choice to put money into Texas can even be based mostly on the flexibility to acquire reduction on native property taxes, Tesla mentioned.

Chief Govt Officer Elon Musk has mentioned beforehand that Tesla may need to enter the mining and refining business straight at scale as lithium costs surge.

Musk has additionally been vocal concerning the want for extra gamers within the lithium refining business. “You possibly can’t lose. It is licensed to print cash,” he had mentioned on the firm’s second-quarter earnings name.

Securing a gentle provide of battery parts is seen crucial for Tesla because it faces fierce competitors within the fast-growing marketplace for electrical vehicles.

If authorized, development might start within the fourth quarter of 2022 and would attain industrial manufacturing by the tip of 2024, Tesla mentioned within the software dated Aug. 22.

Below the plan, Tesla will ship the ultimate product from the refinery by truck and rail to numerous Tesla battery manufacturing websites supporting the provision chain for large-scale and electrical car batteries.

Tesla additionally mentioned it will use much less hazardous reagents and create usable byproducts as in comparison with the standard course of.

LITHIUM SCRAMBLE

Lithium costs have skyrocketed this yr as a consequence of surging demand from the auto sector. China stays the world’s largest lithium processor, although proposed rival initiatives in the USA and European Union have confronted a variety of setbacks.

If Tesla’s plan goes forward, the carmaker might turn into the primary within the sector to take a position straight in lithium refining as automakers scramble to sew up offers with miners and refiners.

Battery makers are additionally seeking to enhance manufacturing in the USA, the place a shift towards EVs might enhance because the nation implements stricter regulation and tightens tax credit score eligibility.

Tesla itself signed a five-year provide cope with Australia’s Liontown Sources earlier this yr, whereas rival EV makers Stellantis and Byd have invested in miners around the globe.

CATL, the world’s greatest battery maker, has additionally taken stakes in lithium miners.

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