Telsa’s new lithium plant is nearly finished, but it faces a new challenge: water supply. The new factory in which Tesla CEO Elon Musk hopes to produce lithium has yet to sign a water contract.
In December, the company announced that it would begin testing the facility’s ability to process lithium. To do so, the lithium refinery may require up to 8 million gallons per day.
The plant was built in Lost Creek, a hot spot in South Texas with a drought status of three, which means shutting down non-essential water use across facilities and conserving water for everyday use. “They’re telling us to take shorter showers and turn off the faucet when we’re brushing our teeth,” said Marie Lucio, a Lost Creek resident.
Musk expressed relief in a Tesla earnings call in mid-2023 that battery metal prices had fallen. “Lithium prices went absolutely insane there for a while,” he informed me.
Musk wanted to begin production this year in order to establish a domestic supply chain for the raw materials required for electric vehicles as the market’s leading car manufacturer.
Telsa stated in 2022 that the plant would require 400,000 gallons per day to operate, raising concerns about Texans’ access to adequate water.
A year into construction, Tesla’s plant manager, Jason Bevan, told a county judge that the company had “struggled to advance the discussion” regarding water agreements. “I’m at a stage now where we need to escalate the urgency around getting this agreement complete,” he told reporters at the time.
The South Texas Water Authority manages the water in the area, but it has not sold it directly to Tesla. Instead, they are currently negotiating a water contract with Nueces Water Supply Corp., a water utility company.
Musk was able to proceed with construction without a water contractor by locating in buffer zones or unincorporated areas that require less government oversight. However, Musk will have a difficult time obtaining the necessary amount of water if it has an impact on the surrounding townspeople.
“We’re not equipped to handle getting water to these industries,” Lucio said, citing the area’s existing problems with old infrastructure and water quality.
