Tesla plans to build a converter station near its German Gigafactory to produce lithium hydroxide, a key ingredient in the electric vehicle batteries the company plans to make there.

The move is part of Tesla's effort to secure a reliable supply of lithium hydroxide, which is currently in short supply. By producing its own lithium hydroxide, Tesla can avoid the volatile prices and supply disruptions that have plagued the battery industry in recent years.

Tesla has already signed a deal with a Chinese company to supply the raw materials for the converter station. Construction is expected to begin in the first half of 2020, and the facility is expected to be operational by the end of the year.

The German Gigafactory is Tesla's first European factory, and is currently under construction near Berlin. When complete, it is expected to produce up to 500,000 electric vehicles per year.