Chinese car giant BYD is reportedly in talks with Brazilian lithium producer Sigma Lithium to obtain materials for electric vehicle (EV) production, aiming to solidify its position as the world’s largest EV manufacturer.
BYD recently eclipsed Tesla in EV production and is investing US$620 million in developing its first factory outside Asia, transforming a former Ford plant in the Brazilian city of Camaçari into a facility producing hybrid and electric vehicles, chassis for electric trucks and buses, and processing lithium and iron phosphate.
Although the form of the potential BYD and Sigma Lithium collaboration – supply agreement, joint venture or acquisition – remains open, the evolving relationship between the two companies bodes well for the automotive firm’s pursuit of an integrated supply line in Brazil.
[See more: BYD launches an electric car entirely manufactured in Brazil]
Sigma Lithium bills itself as the only global producer of triple-zero green lithium – producing zero carbon, zero tailings and zero hazardous chemicals – setting a new sustainability standard for the battery materials industry.
While the company, valued at US$2.9 billion, is considered a key player in the Brazilian lithium market, it posted a net loss of US$18.9 million in the first nine months of 2023. A sharp decline in lithium prices sent share prices tumbling, reportedly prompting a strategic review by the board and a potential sale of the business.
With talks between Sigma and BYD ongoing, the auto giant must also contend with Western attempts to stymie China’s access to technology and critical resources, potentially hampering its efforts to expand internationally. BYD intends to establish a factory in Hungary, for example, even as the European Commission investigates the Chinese EV industry for what it describes as unfair competition.
