EV giant Tesla (NASDAQ:TSLA) recently began construction of its $375 million lithium refinery located near Corpus Christi, Texas. Importantly, the business forecasts that by 2025, it will be able to produce enough battery-grade lithium to assemble 1 million electric vehicles.
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Lithium is a key element used to make batteries for electric vehicles. At present, currently enjoys a commanding lead in the lithium refining industry, followed by Australia and Chile.
As a result of the move, Tesla will become the only automaker in North America to refine its own lithium. Further, it will help improve the company’s supply chain issues and lessen its reliance on China for the metal amid growing tensions with the United States.
Tesla’s CEO Elon Musk plans to finish building the refinery next year and start full-scale production in 2025. Until then, Tesla would continue to source lithium from its current vendors, Albemarle (ALB) and Livent (LTHM).
Additionally, the company doesn’t want to use the conventional method of refining lithium at its new refinery. Tesla would use less hazardous materials like soda ash in place of sulfuric acid and other potent chemicals that have a negative impact on the environment.
Is Tesla a Buy Stock?
Analysts are cautiously optimistic about TSLA stock with a Moderate Buy consensus rating based on 15 Buys, 12 Holds, and four Sells. The average price target of $202.15 implies upside potential of 17.7% from the current level.
