Tennessee will house the nation’s largest lithium refining plant to power EVs

Lithium is the lightest metal on Earth, and it’s a key ingredient of the batteries that will power future cars and the grid.

Tennessee will soon have the largest lithium processing plant in the nation. North Carolina-based Piedmont Lithium is constructing a new facility in Etowah, near Chattanooga, to produce the component of electric vehicle batteries.

“Every electric car needs a battery. Every one of those batteries is a lithium-ion battery. Just about everything else in the battery could be substituted with something else, but there’s no substitute for lithium,” said Piedmont Lithium CEO Keith Phillips. 

The U.S. Department of Energy just announced $500 million in grants for three Tennessee projects related to battery manufacturing: a graphite plant in Chattanooga, a facility to create the “separators” between the electrodes of batteries in Clarksville and the lithium plant in Etowah. This funding came as part of a $2.8 billion package for U.S. battery manufacturing. 

‘The market is going to need way more than we can produce’

Piedmont Lithium plans to start building its new facility next year. By 2025, the plant is expected to produce enough lithium hydroxide for at least half a million cars each year. 

To create lithium hydroxide, companies must first mine for the ore, which is the natural solid material from which a metal or mineral can be extracted. The U.S. has a mine in Nevada but mostly imports lithium from Argentina and Chile.

Next, the extracted metal can become a concentrate. Piedmont is planning to launch projects in Quebec, Ghana and North Carolina in the next few years to create spodumene concentrate. 

From the concentrate, Piedmont can then create the desired compound, lithium hydroxide. Traditional methods to produce this compound have involved sulfuric acid, but Piedmont says its technique, which involves high pressure chemical processes, produces higher yields with less environmental risks. 

Finally, the compound can be transported to a battery manufacturer. 

Piedmont Lithium expects that it will produce about 30,000 tons of lithium hydroxide annually, overtaking the current, estimated domestic capacity of about 15-20,000 tons per year. But Phillips said this will still only represent about 5% of the expected demand in the late 2020s. 

“The bottom line is that the market is going to need way more than we can produce,” Phillips said. “The battery companies, until we build more plants like this, are going to require imported material.” 

Tennessee has become a hub for electric vehicle manufacturing in recent years. Last fall, Ford announced an $11 billion investment for new EVs in Kentucky and Tennessee — an announcement that followed increasing economic and political pressures to transition from fossil fuel-powered cars. 

The three DOE-backed projects could promote even more EV manufacturing in the state down the line, according to Phillips. 

“We think our business could be a magnet for others to come,” he said.