Tesla is considering building its new lithium refinery on the Texas Gulf Coast and is looking to avoid paying property taxes in exchange for investing in the Republican-run state, according to documents released Friday.
Tesla may choose to build the facility in Texas based on its ability to receive relief from local property taxes, according to an application the company sent to the Texas Comptroller’s Office in late August. The company is looking to apply for a tax break under Chapter 313 of the state’s tax code which allows the government to give a 10-year limitation on property taxes to companies that choose to do business in Texas.
If the refinery is approved Tesla would join Ford, Honda, and other automakers who are constructing new EV and battery facilities in Republican-run states. The new refinery could help expand the company’s operations in Texas after it moved its headquarters from Palo Alto, California, to Austin in October 2021.
Tesla told Texas Comptroller that the facility could be located “anywhere with access to the Gulf Coast shipping channel” and said that it is also evaluating a competing site in Louisiana, according to its application.
The electric vehicle (EV) manufacturer said that the refinery, which will process lithium ore into EV batteries, will be the first of its kind in North America.
Tesla CEO Elon Musk is urging his company to secure its lithium supply chains as the metal becomes increasingly expensive amid the surging global demand for EVs.
The international benchmark price of lithium nearly tripled from August 2021 to August 2022, according to Benchmark Mineral Intelligence.
The proposed facility would employ more than 160 employees and be constructed south of the south Texas city of Robstown, according to the document. Tesla could begin constructing the facility at the end of 2022 but it would likely not be finished until the end of 2024.
The EV maker said it is “still evaluating the feasibility of this project” and that “only very preliminary development activities have begun,” according to the letter.