Electric car leader Tesla is considering a lithium hydroxide refining facility on the gulf coast of Texas.

The company said the plant’s primary focus would be the development of “battery-grade lithium hydroxide” and be “the first of its kind in North America,” according to a newly released letter to the Texas Comptroller’s Office.

Tesla would process “raw ore material into a usable state for battery production” then ship the lithium hydroxide to various Tesla battery manufacturing factories, the application said.

In April, Tesla CEO Elon Musk said the company may need to get into lithium refining after the cost of the metal had “gone to insane levels.”

The price of lithium surged 120% this year, according to a tracking index from Benchmark Mineral Intelligence.

As part of the application to Texas, the company said it is also considering “other battery materials processing, refining and manufacturing and ancillary manufacturing operations in support of Tesla’s sustainable product line.”

Tesla said that it is still “evaluating the feasibility of this project” and “only very preliminary development activities have begun.”

Musk’s firm said the project could be located “anywhere with access to the Gulf Coast shipping channel.” Tesla said it is evaluating a competing site in Louisiana.

Tesla said the only way this project will be viable is if Texas gives it tax breaks under its law.

“In the case of the investment on this proposed project in Texas, the decision will be based on a number of commercial and financial considerations, including the ability to obtain relief regarding local property taxes,” according to the application.