Still a few challenges ahead for Tesla in Nevada
It is not yet clear when Tesla´s production in Nevada can finally start.
Karl HoffmannOctober 5, 2026
Tesla Inc.'s plan to produce lithium for electric vehicle batteries near its Giga factory in Nevada faced major challenges from the start, including an arduous permit process, unsafe access to water, and questions about untested methods. CEO Elon Musk told shareholders on Tuesday that Tesla had secured the rights to 10,000 acres in Nevada, where the company plans to produce lithium from clay deposits using an in-house process. That move would make Tesla the first company in the world to make the white metal from clay commercially. Lithium is made either from brine, commonly found in South America, or from hard rock of spodumene, commonly found in Australia. In Nevada, Tesla plans to mix clay with table salt and then add water, which it believes will cause a reaction in which the salt leaches with lithium, which can then be extracted. The remaining clay would be put back into the earth to reduce environmental damage. "It's a very sustainable way of producing lithium," said Musk, who did not say where in Nevada the company acquired the lithium rights or whether development began. The plan met with backlash almost immediately, with critics describing Musk's plan as being too simple and insufficiently detailed. The return of rock back into the earth after the mining of minerals, for example, is already common industrial practice through the use of tailing ponds. "This Tesla plan raises a lot more questions than it answers," said Chris Berry, an independent advisor to the lithium industry. "Should we just take Elon Musk at his word that the costs will be lower than existing lithium projects? Tesla, based in Palo Alto, California, did not immediately respond to a request for comment. Nevada has already issued several lithium-clay projects. Projects in development including one from Lithium Americas Corp, which has been applying for state approval for more than a decade, and another from ioneer Ltd. Lithium Americas has shown confidence that it will successfully make lithium through a process that involves acid leaching, Tesla said its process will not involve acid, which raises further questions. "If it was possible to manufacture battery-grade lithium in commercial quantities from clay, why isn't it already," said Berry. Any Tesla lithium project would require an intensive application process for necessary permits that could drag on for years. "Mining lithium is a huge challenge," said Pedro Palandrani of Global X Lithium & Battery Technology ETF, which has interests in Tesla and lithium producers. "If Tesla really wants to fly alone, we're talking four to five years to really see some kind of lithium production," said Pedro Palandrani. Tesla's plan would likely require significant amounts of water as well, forcing the company to battle ranchers for access to underground reservoirs in the arid state. The Albemarle Corp. operated the only existing US lithium mine at a location about 200 miles (322 km) north of Las Vegas until it closed down last month. Operating since the late 1960s, the site produced less than 5,000 tons of lithium per year, a relatively small amount and far less than Tesla would need.
