Tesla’s Texas lithium plant begins operations amid market glut – Tesla (NASDAQ:TSLA)
Tesla Inc. Tesla Production has begun at the lithium refinery in Robstown, Texas. The company announced Monday that feedstock successfully passed through the facility’s kiln for the first time.
what happened: The Corpus Christi-area plant represents the largest battery-grade lithium refinery in the United States and pioneered the acid-free refining process.
Global lithium prices have plummeted to below $10,000 per ton from a peak of $80,000 per ton in 2022, according to industry data.
“Increasing lithium refining capacity is critical to a sustainable energy economy“, Tesla said on the X.
The timing of Tesla’s refinery coming online coincides with an expected lithium supply glut, resulting in a lithium glut. UBS Analysts expect this to continue until 2027.
See also: Former Google CEO Eric Schmidt sees AI drones as future of warfare but stresses need for ‘meaningful human control’
why it’s important: Despite challenging market conditions, Tesla CEO Musk It has always been optimistic about battery production capacity, recently pointing out that the growth of battery manufacturing is “almost several times that of automobile production.”
The opening of the Texas factory represents a strategic move for the U.S. battery supply chain and is supported by the Inflation Reduction Act’s push for domestic production.
It is said that the reason for this situation is that despite the current low prices, Chinese companies still maintain a dominant position in the market, while some global producers are operating at a loss. Martin JacksonBattery Raw Materials Supervisor Krugru.
S&P Global forecasts that lithium prices will stabilize between $9,900 and $11,600 per ton by 2026, suggesting that the market environment is challenging but may stabilize as Tesla’s new factory operates.
price action: Tesla shares closed at $436.23 on Friday, up 4.34%. Year to date, the stock has soared 75.60%. According to data from Benzinga Pro, the stock hit a 52-week high of $436.30 and a 52-week low of $138.80, with a price-to-earnings ratio of 119.61.
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