In a related move, Tesla now plans to construct a battery-grade lithium hydroxide refining operation in either Texas or in Louisiana, according to Reuters, citing an application filed with the Texas Comptroller’s Office.
The project would allow Tesla to process “raw ore material into a usable state for battery production,” according to the application.
The company has characterized that step as a way to secure its supply line for battery production.
Fitch Ratings predicted in a letter that other automakers will follow Tesla’s lead on in-house lithium refining.
“We believe that this project by Tesla is of note, as it showcases the growing expediency of bringing upstream operations in-house in order to insulate firms against lithium price volatility,” Fitch said.
But Fitch also noted that Tesla’s plans are being driven by the new U.S. EV tax rules.