Tesla plans to build a money printing factory in Texas, a lithium refinery
Sep 09,2022 | Tesmag
The electric car maker wants to go a step further in its downward vertical integration strategy, which includes refining lithium minerals into lithium hydroxide suitable for battery production. For this, it has made a request to the State of Texas (USA), Tesla wants a lithium refinery in the area of the Gulf of Texas; that is, near port access.
It would be the first installation of this type in the United States -and in North America, by extension-, since the lithium hydroxide that enters the country is already refined abroad. In the second results conference of the year, this concept was already dropped by Elon Musk to the shareholders, who needed more companies refining lithium, why not Tesla?
"You can not lose. It's like a license to print money," she said. To put us in context, Elon Musk called the Berlin and Austin gigafactories with an underutilized capacity just the opposite: incinerators of money. Given the quantities that Tesla handles, it is a conceptual simplification like soccer campuses are to talk about the surface.
Nevada Battery Gifafactory
Tesla's interest in Texas is not only due to geographical reasons -the Nevada gigafactory, which produces batteries, would not be far away-, but it is also essential to have access to discounts in terms of taxes and fees. The Lone Star State in that sense is savvier than California, which is beginning to scare away certain companies, including Tesla itself, whose headquarters are now in Texas.
If the approval of the authorities is achieved, the plan is to start plowing the land before the end of the year -the fourth quarter and start operations at the end of 2024. This is stated in the request registered on August 22. This activity will obviously have an environmental impact, but it will be mitigated with less dangerous reactive chemicals and by-products that are more suitable for reuse in other industries.
The lithium hydroxide produced will be distributed by road and rail to the cell production facilities. In parallel, Tesla is also looking to source recycled raw materials through its agreement with Redwood Materials. In this way, electric cars produced by Tesla in the United States will be “more American” for the purposes of the Inflation Reduction Act, which will gradually require more local content in batteries in order to grant subsidies to their buyers.
A race in which the last fool is
The projections for the manufacture and sale of electric cars throughout the decade are such that they force all manufacturers that want to make large volumes to secure batteries and their precursors years in advance. For example, Tesla itself signed a deal earlier this year with Liontown Resources in Australia, one of the suppliers with whom Ford has also made huge contract purchases. General Motors did the same too.
There are several ways to ensure you have batteries in the future. In the usual paradigm, the batteries were purchased from a supplier and the problem was outsourced. The problem becomes internal and explosive when the supplier cannot deliver. Some manufacturers have made large investments in companies in the mining and chemical sectors, such as Volkswagen, Renault, or Stellantis, to keep them controlled with a shorter rope. These manufacturers will have assured cell production for them.
But without a doubt, there is nothing more reliable than having the supply chain much more controlled at home. That has worked well for Hyundai for a long time. If Tesla begins to refine lithium directly and does so in large quantities for lithium that will move only in the United States, between the savings and the benefits -especially if it sells lithium hydroxide to third parties-, we will get closer to the graphic definition of print money.