Elon Musk would give Tesla the 'license to print money' as it applies for a battery-grade lithium refinery on the Gulf Coast
According to a letter of intent sent to the Texas Comptroller's office, Tesla is looking to build a battery-grade lithium refining plant on the Gulf Coast that will produce lithium hydroxide ready to ship to Tesla's EV battery factories in the US. Tesla would be killing two birds with one stone with a lithium ore refinery of its own there, as Elon Musk went on record recently saying that at current battery material prices, lithium refining is a "license to print money," while Tesla has been urging miners like those in Australia to go into refining, too.
Currently, the lion's share of battery-grade lithium ore refining is done in China, but Tesla sooner or later will have to comply with the Inflation Reduction Act's new EV subsidy requirement that batteries or their materials are produced in the US or sourced from fair-trade agreement countries. Its Korean battery makers already started the process of weaning off Chinese dependencies across their supply chain and now Tesla may be looking to do the same for its own battery production like the 4680 cells it makes in Austin.
With the letter, Tesla warns that it will go ahead if it gets tax breaks and other incentives from the Lone Star state. "In the case of the investment on this proposed project in Texas, the decision will be based on a number of commercial and financial considerations, including the ability to obtain relief regarding local property taxes," reads the application.
This is par for the course for Elon Musk's Tesla activities in Texas, though, as part of the reasons he relocated the company's headquarters there was to escape California's taxing and regulations. Back in April, he said that "price of lithium has gone to insane levels" and "Tesla might actually have to get into the mining and refining directly at scale, unless costs improve," and the proposed Gulf Coast refinery is meant to do exactly that, perhaps sourcing lithium from places of abundance that are relatively nearby like Chile or Argentina in South America.