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Borderlands: Tesla proposes $375M lithium refinery for EV batteries in Texas

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Tesla proposes $375M lithium refinery for EV batteries in Texas; PGT Trucking expands border operations; Lineage Logistics signs lease at Houston ColdPort; and Otay Mesa port of entry receives $150M federal grant.

Tesla seeks $375M lithium refinery for EV batteries in Texas 

Amid surging global demand for electric vehicles, automaker Tesla Inc. is looking to create a domestic lithium supply chain for EV batteries.

Tesla (NASDAQ: TSLA) recently filed a notice with the state of Texas seeking special tax breaks for the proposed lithium refinery to be located in Robstown, Texas, about 20 miles from the Port of Corpus Christi and less than 200 miles from its Gigafactory Texas in Austin.

Tesla touted the proposed lithium refinery as the first of its kind in the United States, stating it would “process raw ore material into a usable state for battery production,” according to an application with the Texas Comptroller’s office dated Aug. 22. 

Tesla said it wants a site that has access to shipping channels along the Gulf of Mexico.

“Tesla will ship lithium products from the refinery by trucks and rail to various Tesla battery manufacturing sites supporting the supply chain for large-scale and electric vehicle batteries,” according to state documents.

If approved, Tesla could begin construction on the refinery by the end of the year and production of battery-grade lithium hydroxide could begin in 2024. The refinery could create up to 162 full-time jobs by 2025, with salaries of up to $81,000 per year, Tesla said.

Tesla has not received any regulatory permits and said its final decision will be dependent on how much state and local property tax relief it can receive, stating it’s a “determining factor for investment in Texas.”

According to an analysis by the Austin American-Statesman, the tax program could save Tesla about $16.2 million in taxes.

In its application with the Texas Comptroller’s office, Tesla also said it’s considering a site in Louisiana for the lithium refinery but did not specify a location.

CEO Elon Musk tweeted in April that Tesla may need to begin refining lithium because of rising prices.

“Price of lithium has gone to insane levels! Tesla might actually have to get into the mining and refining directly at scale, unless costs improve,” Musk said. “There is no shortage of the element itself, as lithium is almost everywhere on Earth, but the pace of extraction/refinement is slow.”

The price of lithium is up 120% this year, according to a tracking index from Benchmark Mineral Intelligence. The global lithium market size was valued at almost $7 billion in 2021 and is expected to grow 12% by 2030, according to Grandview Research.

Along with EV batteries, lithium is also used in a host of other electronic devices such as laptop computers and cellphones.

“Electrification of vehicles is projected to attract a significant volume of lithium-ion batteries, thus anticipated to drive the market over the forecast period,” Grandview Research said.

The U.S. mines about 1% of global lithium, with the majority of raw lithium supplies coming from Australia, Argentina and Chile. China refines about 60% of the world’s lithium with 148 refineries across the country, according to Gavekal Research as reported by Barron’s.

PGT Trucking broadening border operations

PGT Trucking Inc. is expanding their operations in Laredo, Texas, with a new state-of-the-art logistics center. 

The facility will be located on 7.73 acres and include an operations center, driver amenities and a truck maintenance shop. It will provide a regional base for over 70 drivers. Completion of the new facility is scheduled for December 2023.

“We’re looking forward to growing our relationships and strengthening partnerships in the south to support our customers’ international shipping needs,” Sergio Villarreal, PGT Trucking’s manager of southwest regional operations, said in a news release

Pennsylvania-based PGT Trucking is a carrier offering flatbed, dedicated, international and specialized services. The company opened its first facility in Laredo in 1995.

Lineage Logistics finalizes lease at Houston ColdPort

Lineage Logistics recently signed a lease at Houston ColdPort, aiming to expand its cold storage supply chain solutions across Southeast Texas.

Lineage is leasing a 315,111-square-foot warehouse that features a 50-foot clear height, 60-foot deep cold storage dock space, 38 docking positions and a 200-foot deep truck court with 57 parking spaces.

Houston ColdPort is a newly constructed industrial park in northeast Houston.

“Houston ColdPort further expands our leading presence in the Houston metro area and strengthens our capabilities to efficiently import and export customer products through Port Houston,” said Brian Beattie, president, North America – West, of Lineage Logistics. 

Michigan-based Lineage Logistics closed the lease as part of a partnership with the building’s owner and developer, Boomerang Interests. Lineage is one of the world’s largest temperature-controlled industrial real estate investment trusts and logistics providers, with over 400 facilities in 20 countries.

Otay Mesa port of entry receives $150M federal grant

The Otay Mesa East port of entry in Southern California was recently awarded a $150 million grant from the Biden administration’s Infrastructure Investment and Jobs Act.

The funds will be used for “highway, multimodal freight and rail projects that will make the nation’s transportation systems safer and more resilient, eliminate supply chain bottlenecks and improve critical freight movements,” according to a news release from the Department of Transportation. 

Officials said the federal grant ensures the $1.1 billion Otay Mesa East-Otay II project will be completed on schedule. The Otay Mesa port of entry is located just south of San Diego along the U.S.-Mexico border.

“This really puts it together and closes the loop around the funding to take us to the final construction,” Maria Rodriguez, project development program manager for the San Diego Association of Governments, told Border Report

The project began construction last month and will create a new border crossing 3 miles east of the original Otay Mesa port of entry. It will include 10 lanes, five for passenger vehicles and five for cargo transport. The project is scheduled to be completed in 2024.

Watch: Wholesale diesel fuel prices drop to $3.59 per gallon.

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Noi Mahoney

Noi Mahoney is a Texas-based journalist who covers cross-border trade, logistics and supply chains for FreightWaves. He graduated from the University of Texas at Austin with a degree in English in 1998. Mahoney has more than 20 years experience as a journalist, working for newspapers in Florida, Maryland and Texas. Contact nmahoney@freightwaves.com