Tesla is evaluating to start a Lithium refinery for EV batteries in Texas

Electric car giant Tesla is assessing the feasibility of a lithium hydroxide refining facility on the gulf coast of Texas.

According to the company, the plant would focus on developing “battery-grade lithium hydroxide,” and it will be the first in North America. Tesla would process raw ore material into a usable state for battery production and then ship the lithium hydroxide to various battery manufacturing factories of the company.

In April, Tesla boss Elon Musk said the company may need to get into lithium refinery because the cost of the metal had “gone to insane levels.” According to a tracking index from Benchmark Mineral Intelligence, the price of lithium is up 120% this year.

Tesla’s move is also likely a bid to diversify the supply of its battery and lithium production. China controls more than half of the lithium refining and processing in the world, and the United States just 1%. Tesla said that if the application for the Lithium refinery is approved, construction could begin in the fourth quarter of 2022. By the fourth quarter of 2024, the project will reach “commercial operations.”