Investing.com -- Tesla (NASDAQ:TSLA) Inc. is nearing completion of a lithium refinery located twenty miles outside Corpus Christi, Texas. The refinery, which is part of Tesla's broader effort to build a more robust domestic supply chain for electric vehicle batteries, could require as much as 8 million gallons of water per day. However, the company has yet to secure a contract for the water needed to operate the facility.
The $1 billion project was updated publicly in December, with Tesla stating that it was beginning to test lithium processing capabilities at the new factory. However, the lack of a water contract could pose a challenge to CEO Elon Musk's ambition of converting lithium into chemical products for battery production.
Tesla's plans have raised concerns among some residents of the local area, known for its dry conditions, who worry about the availability of water for their own needs, in addition to supplying a large factory.
In 2022, Tesla estimated that it would need 400,000 gallons of water per day to run the lithium plant, with peak usage reaching 800,000 gallons per day. By 2024, the forecast had risen dramatically, with a Tesla employee informing consulting firm Raftelis that the figure could reach as high as 8 million gallons per day, as per South Texas Water Authority records.
The water is controlled by the South Texas Water Authority, but Tesla is negotiating a contract with Nueces Water Supply Corp., a water utility company. Neither organization has commented on the negotiations.
To put Tesla's potential water usage into perspective, the average American family uses about 300 gallons of water per day, according to the Environmental Protection Agency. For the town of Robstown, which had 3,804 households as of 2023, this equates to about 1.1 million gallons a day. Tesla's high-end estimate of 8 million gallons per day is equivalent to eight times the average residential water use in Robstown. According to the US Geological Survey, this is enough water to fill eight ten-foot-deep swimming pools nearly the size of a football field.
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