Tesla is reportedly evaluating setting up a battery-grade lithium hydroxide refinery on the gulf coast of Texas.
In an August application filed with the Texas Comptroller's Office, the automaker said that the facility would be the first of its kind in North America and that it was also considering the development of facilities to support other types of battery materials processing, refining and manufacturing and ancillary manufacturing operations in support of its sustainable product line.
Tesla would process raw ore material into a "usable state" for battery production.
"The process Tesla will use is innovative and designed to consume less hazardous reagents and create usable byproducts compared to the conventional process. The final product, battery-grade lithium hydroxide, will be packaged and shipped by truck and rail to various Tesla battery manufacturing sites supporting the necessary supply chain for largescale and electric vehicle batteries," Tesla said.
Proposed improvements include supporting infrastructure and lithium refining equipment, operation buildings, a laboratory for research and development, utility distribution improvements, rail spur, cooling towers, safety and fire prevention equipment, wastewater treatment infrastructure, ancillary manufacturing operations and equipment necessary for electric vehicle (EV) and battery production, as well as loading docks, roadways, parking lots, warehouses and other facilities.
If the site is approved, early construction could begin in the fourth quarter of this year, with the project reaching commercial operations by the same quarter in 2024.
Tesla said it is still evaluating the feasibility of the project and that only "very preliminary development activities" had begun.
The project, the company noted, could be located anywhere with access to the Gulf Coast shipping channel, and it is evaluating a competing site in Louisiana as an alternative.
Ultimately, the decision will also be based on the ability to obtain relief on local property taxes.
Tesla did not respond to FOX Business' request for comment.
Tesla CEO Elon Musk previously has tweeted that the company might have to enter the mining and refining industry directly at scale as lithium prices surge.
In April, the Tesla CEO told analysts in an earnings call that lithium production is a hurdle to meeting EV demand and urged entrepreneurs to get into the mining business.
"Right now, we think mining and refining lithium… appears to be a limiting factor, and certainly is responsible for quite a bit of cost growth in sales," he said. "I think it’s the single biggest cost growth item right now,"
"Can more people please get into the lithium business? Do you like minting money? Well, the lithium business is for you," Musk said.
China is the world's largest lithium processor.
FOX Business' Bradford Betz and Reuters contributed to this report.