A new lithium hydroxide chemical plant near Austin, Texas, is planned for construction to supply needed cathode materials for Tesla's Cybertruck manufacturing facility, according to Benchmark Minerals. The new Tesla Gigafactory will be located on an adjacent property.

The move consolidates part of the battery supply chain for Tesla, ensuring a reliable source of lithium for use in EV battery cells, which is typically supplied by Chinese refineries. Although China is a key market for Tesla, trade between the U.S. and China has been hurt by the COVID-19 pandemic and economic disputes.

The plant will produce lithium hydroxide from spodumene in a hydrometallurgical process Tesla said is sulphate-free and reduces production costs by one-third. It is the first commercial usage of this manufacturing technique. Piedmont Lithium will supply approximately 53,000 tpa of spodumene to the facility for five years, beginning in 2022.

Raw materials for EV batteries are a challenge for their growth. Separately from this effort, Tesla is also investigating the possibility of extracting lithium from clay deposits found in Nevada.

Source: Benchmark Minerals Intelligence