US electric vehicle (EV) producer Tesla has started building an in-house lithium refinery in Corpus Christi, Texas.
"We expect to supply EV battery-grade lithium to around 1mn EVs [from this plant]. Output from this plant will be more than combined refined output from all other producers in North America," said Tesla's chief executive officer Elon Musk. The plant's specific output capacity was undisclosed.
Tesla aims to complete construction of the facility by the end of 2024 and bring it to full capacity a year later, Musk said. "The fundamental choke point in the EV development is the availability of battery-grade lithium. Tesla's innovative approach to refining lithium will be unique in the industry," he added.
Increasing lithium refining capacity is critical to a sustainable energy economy, Tesla said. The facility will also process other intermediate lithium feedstocks, including those from recycled batteries and manufacturing scrap. It will also eliminate a refinery by-product sodium sulphate, which is a mixture of sand and calcium carbonate.
This investment is designed to strengthen Tesla's position in the upstream segment of the wider EV-battery-lithium industry chain to provide it with more control over feedstock costs, according to market participants. Musk as early as last year also said that prices for lithium had gone to "insane" levels and Tesla might have to get involved in mining and refining directly at scale, unless costs improve. "There is no shortage of lithium, but the pace of extraction and refinement is slow," he said.
Lithium carbonate prices surged to an all-time high of 561,000-576,000 yuan/t ($81-83/kg) in November last year, up by more than threefold from February 2016 when Argus launched this assessment, driven by surging demand from the EV segment. Argus forecasts global EV sales will rise to almost 49mn units by 2033 from 18.1mn units in 2024, which will bolster the world's lithium demand to reach 3.7mn t of lithium carbonate equivalent by 2033.
Tesla's installed EV production capacity in the first quarter almost doubled from a year earlier to 2mn EVs/yr as it ramped up EV production in Shanghai, China; Austin, Texas and Berlin, Germany, from 1.05mn EVs/yr a year earlier. The firm plans to continue expanding its vehicle production as it seeks to average 50pc growth in its vehicle deliveries over the next few years.
