Tesla formally broke floor Monday on a Texas lithium refinery, making it the one U.S. automaker to refine its personal lithium.

CEO Elon Musk mentioned the refinery will produce sufficient battery grade lithium for 1 million electrical automobiles by 2025, which might make Tesla the biggest processor of lithium in North America. Tesla will proceed to depend on present suppliers like Albermarle and Livent because it goals to succeed in its 2023 gross sales objective of round 1.8 million vehicles globally.

Lithium is the important thing important materials in lithium-ion batteries that energy the electrical car revolution. Immediately, the U.S. produces simply 1% of the world’s lithium, with Australia, Chile and China main the way in which. The Biden administration’s EV tax credit score goals to spur extra home battery materials sourcing and manufacturing and scale back the U.S.’s reliance on China, which hosts 60% of the world’s lithium refining capability and practically 80% of the world’s lithium-ion battery manufacturing capability.

“As we glance forward just a few years, a elementary choke level within the development of electrical automobiles is the provision of battery grade lithium,” mentioned Musk, throughout the ground-breaking ceremony exterior of Corpus Christi.

The CEO drove as much as the occasion in a Cybertruck full with a roof rack accent that caught the eye of trade watchers. Authorities officers reminiscent of Texas Governor Greg Abbott, Nueces County Decide Connie Scott and Deputy Assistant Secretary on the U.S. Dept. of Vitality Kathleen Hogan attended the occasion.

Musk mentioned the corporate goals to complete development on the refinery subsequent 12 months, with full scale manufacturing slated for 2025. The manager described the timeline as “extraordinarily quick by regular requirements.” That could be true, however it’s slower than Tesla had initially projected. Throughout Tesla’s Investor Day in March, Drew Baglino, senior vp of powertrain and vitality engineering, mentioned the corporate aimed to have the refinery operational by the tip of this 12 months and begin manufacturing early subsequent 12 months.

Baglino additionally mentioned on the time that the refinery would have a 50 gigawatt-hour per 12 months capability, one thing Musk didn’t affirm throughout Monday’s occasion.

Throughout Investor Day, Musk additionally inspired different startups to get entangled in refining lithium, which he likened to “minting cash.”

“We’re doing it as a result of we’ve got to, not as a result of we need to,” Musk mentioned beforehand.

Tesla will make investments $375 million to construct the ability, in line with filings with the Texas Comptroller. The refinery is Tesla’s newest enlargement into Texas, which started when the corporate moved its headquarters to the state from California in 2021. The automaker invested practically $6 billion into its Austin gigafactory final 12 months. In January, Tesla mentioned it deliberate to speculate one other $770 million to increase the manufacturing unit to incorporate cathode and drive unit manufacturing and a battery cell testing web site.