Tesla Seeks Tax Relief Considering Lithium Refinery in Texas

Tesla Inc. plans to set up a lithium refinery on the Texas Gulf Coast as it seeks to secure the supply of a key component used in batteries amid the growing demand for electric vehicles.

The potential lithium hydroxide refining plant for batteries, which Tesla says is the first of its kind in North America, “will turn the ore into a usable state for battery production,” the company said. in an application filed with Texas Comptroller’s. Writing desk. Said. ,

Tesla said the decision to invest in Texas will also be based on its ability to obtain local tax relief on the property.

Chief Executive Elon Musk previously said Tesla may have to massively enter the mining and refining industry as lithium prices rise.

Musk also expressed the need for more players in the lithium refining industry. “You can’t lose. It’s licensed to print money,” he said during the company’s second-quarter earnings call.

Ensuring a constant supply of battery components is considered essential for Tesla as it faces stiff competition in the fast-growing electric car market.

If approved, construction could begin in the fourth quarter of 2022 and reach commercial production by the end of 2024, Tesla said in the Aug.22 application.

Under the plan, Tesla will ship the refinery’s final product by truck and rail to various Tesla battery manufacturing sites that support the electric and mass vehicle battery supply chain.

Tesla, whose shares were up 1.4% in pre-market trading, also said it will use fewer hazardous reagents and create usable byproducts than the traditional process.

lithium chaos

Lithium prices have skyrocketed this year due to increased demand from the automotive sector. China remains the world’s largest lithium processor, although rival projects proposed in the United States and the European Union have suffered several setbacks.

If Tesla’s plan is realized, the automaker could become the first in the region to invest directly in lithium refining as automakers scramble to strike deals with miners and refineries.

Arpit Aggarwal, director of venture capital firm Bloom Ventures, said, “Carmakers are trying to make sure they have control over the lithium supply, protecting against any future geopolitical situations that could arise in the event of a supply disruption. Possibly possible. Startups like Euler Motors and Yulu.

He said Tesla will benefit from reduced logistics costs and US government incentives.

Battery makers are also looking to increase production in the United States, where the transition to electric vehicles could intensify as the country implements stricter regulations and strengthens tax credit eligibility.

Tesla itself signed a five-year supply agreement with Liontown Resources in Australia earlier this year, while rival electric vehicle manufacturers Stelantis and Byrd have invested in miners from around the world.

CATL, the world’s largest battery manufacturer, has also acquired a stake in lithium miners.

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