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Tesla secured its own lithium mining rights in Nevada after dropping a plan to buy a company there, according to people familiar with the matter.

The automaker held discussions in recent months with Cypress Development Corp., which is seeking to extract lithium from clay deposits in southwest Nevada, but the parties didn’t reach a deal, the people said, asking not to be named because the information isn’t public. The electric car maker, which has vowed to slash its battery costs by 50%, instead focused on the plan that Chief Executive Officer Elon Musk outlined last week to dig for lithium on its own in the state.

Producing lithium from clay has so far proven difficult and costly. No company has been able to produce commercial quantities using the practice. But a push into mining is at the center of Tesla’s plan to cut battery costs and deliver on a promise to bring a $25,000 electric car to market. Musk told investors last week that Tesla has secured access to 10,000 acres of lithium-rich clay deposits in Nevada and planned to use a new, “very sustainable way” of extracting the metal.

Tesla didn’t respond to emails requesting comment. Cypress declined to comment on any talks with the automaker.

The carmaker’s decision to make its own battery cells, and to enter production of battery cathodes and associated raw materials, is intended to add in-house capacity alongside deals with external suppliers as demand for electric vehicles rises. The company this month struck a five-year raw materials pact with Piedmont Lithium Ltd., which has a project in North Carolina.

Obtaining lithium from clay deposits has typically been considered too difficult and expensive, due to low recovery rates, according to BloombergNEF analyst Sharon Mustri. BNEF projects about 5% of global supply of mined lithium may come from unconventional resources, mostly clay, by 2030.

Lithium raw materials are most commonly extracted at brine operations which pump liquid from underground reservoirs into vast evaporation ponds, or in traditional hard rock mines. “This move by Tesla supports the importance of clays as a future source of lithium in the United States,” Cypress CEO Bill Willoughby said in an emailed statement, referring to Tesla’s plan to extract lithium from clay.

Musk said Tesla is focusing on development of a process to extract the metal using sodium chloride, or table salt, instead of more expensive chemical reagents. No other mine uses this process to date, according to Mustri.

Flagging plans to use a technology that isn’t yet proven at scale has drawn skepticism from some analysts. “Lithium has never been produced from clay in commercial quantities,” said Chris Berry, president of House Mountain Partners, an industry consultancy.