Elon Musk and Tesla break ground on massive Texas lithium refinery

Tesla Inc. on Monday broke ground on a Texas lithium refinery that CEO Elon Musk said should produce enough of the battery metal to build about 1 million electric vehicles by 2025, making it the largest North American processor of the material.

The facility will push Tesla outside its core focus of building automobiles and into the complex area of lithium refining and processing, a step Musk said was necessary if the auto giant was to meet its ambitious EV sales targets.

“As we look ahead a few years, a fundamental choke point in the advancement of electric vehicles is the availability of battery grade lithium,” Musk said at the ground-breaking ceremony on Monday, with dozers and other earth-moving equipment operating in the background.

Musk said Tesla aimed to finish construction of the factory next year and then reach full production about a year later.

The move will make Tesla the only major automaker in North America that will refine its own lithium. Currently, China dominates the processing of many critical minerals, including lithium.

“Texas wants to be able to be self-reliant, not dependent upon any foreign hostile nation for what we need. We need lithium,” Texas Gov. Greg Abbott said at the ceremony.

Musk did not specify the volume of lithium the facility would process each year, although he said the automaker would continue to buy the metal from its vendors, which include Albemarle Corp. and Livent Corp.

“We intend to continue to use suppliers of lithium, so it’s not that Tesla will do all of it,” Musk said.

Albemarle plans to build a lithium processing facility in South Carolina that will refine 100,000 tons of the metal each year, with construction slated to begin next year and the facility coming online sometime later this decade.

Musk did not say where Tesla will source the rough form of lithium known as spodumene concentrate that will be processed at the facility, although Tesla has supply deals with Piedmont Lithium Inc PLL.O and others.