Mini Series: Can Tesla Break China’s Grip on Lithium
18th February, 2026
Tesla was never just a car company.
From day one, it looked more like a technology platform — one that used electric vehicles as the entry point.
Now it’s evolving into something bigger:
A vertically integrated manufacturing powerhouse.
A company building the industrial backbone for the next generation of technology.
From electric vehicles…
to AI-driven autonomy…
to humanoid robotics.
And sitting right at the centre of it all?
Battery storage.
The Lithium Move That Changes the Equation
In January 2026, Tesla’s Gulf Coast Lithium Refinery in Robstown, Texas became fully operational — just two and a half years after breaking ground.
It is now the largest operating lithium refinery outside of China.
That’s not a headline detail.
That’s strategy.
Today, China controls roughly two-thirds of global lithium refining capacity.
Even though Australia holds some of the world’s largest lithium reserves, most of it is exported and refined overseas. Mining isn’t the bottleneck.
Refining is.
And in the battery economy, whoever controls refining controls battery-grade supply.
Which means they influence cost curves.
They influence scale.
They influence leverage.
Tesla chose not to rely entirely on that system.
Instead, it built domestic capacity capable of producing around 50,000 tonnes per year of lithium carbonate equivalent — enough to power roughly one million EVs annually.
That output feeds directly into Tesla’s U.S. Gigafactories.
Fewer geopolitical risks.
Less shipping complexity.
Stronger North American supply chain resilience.
This Is Bigger Than Lithium
Lithium is just one piece of a much larger design.
Tesla:
Designs its own batteries
Manufactures its own vehicles
Develops its own AI chips
Builds its own software stack
And now refines its own critical raw materials
That level of vertical integration is rare in modern industrial history.
Most companies outsource.
Tesla internalises.
And that changes three things:
Speed – Fewer external dependencies mean faster iteration.
Cost control – Margins improve when you compress the supply chain.
Resilience – Less exposure to global chokepoints.
When you control inputs, you control innovation velocity.
The Manufacturing Engine Is Expanding
The same manufacturing system that scaled EV production is now being applied to:
Grid-scale energy storage
AI compute infrastructure
The Optimus humanoid robot
Humanoid robotics, in particular, could become the next major manufacturing wave.
And if that scales, batteries — and therefore lithium — become even more strategic.
Because robotics, AI infrastructure, and energy storage all sit on the same foundation:
Electrification.
The China Factor
China still dominates battery materials processing.
It has built refining capacity for years while the West focused primarily on mining and assembly.
So the real question isn’t whether Tesla replaces China overnight.
It’s whether Tesla reduces dependence enough to shift bargaining power over time.
Vertical integration doesn’t just improve margins.
It improves strategic optionality.
In a world defined by geopolitical fragmentation and supply chain tension, that may prove to be one of Tesla’s biggest competitive advantages of the next decade.
The Bigger Thesis
Tesla isn’t just building vehicles.
It’s building supply chain independence.
It’s compressing the industrial stack — from raw materials to AI software — under one operating system.
If the next industrial cycle is defined by electrification, autonomy, and robotics, then the companies that control the inputs may control the outcome.
So the question becomes:
Is this enough to break China’s grip on lithium refining long term?
Or is this just the opening move?
Watch this space.