BYD met with Brazilian lithium producer Sigma Lithium for a potential supply deal, Financial Times reports, citing the Chinese electric vehicle giant’s local chair.
Ongoing talks
BYD reportedly met with Sigma Lithium CEO Ana Cabral Gardner in São Paulo in December 2023 to talk about supply deal prospects, which can significantly aid the automaker’s efforts to secure raw material in power battery production.
According to the BYD Brazilian Chair Alexandre Baldy, the Chinese company has been negotiating with the $2.9-billion-valued lithium producer for a probable “supply deal, joint venture or acquisition.” However, Baldy emphasized that “ nothing is concrete” yet.
Both parties also omitted to share more details of the discussions due to a confidentiality agreement.
Why Sigma?
Sigma Lithium, a Toronto and Nasdaq-listed company, started shipping its lithium from its existing hard-rock mine and processing factories in Minas Gerais in 2023.
For context, it extracts lithium spodumene ore and processes it into a lithium concentrate, a key material in battery production.
The Brazilian lithium producer aims to boost its annual production capacity to 270,000 tons.
With all that said, it is unsurprising that BYD considers Sigma to be a potential partner in its electric vehicle push. Its enormous supply of lithium concentrate can significantly aid the Chinese automaker in ramping up its battery production to meet growing demand.
BYD’s expansion in Brazil
BYD considers Brazil to be one of its key markets in its new energy vehicle business. It has already launched six of its popular models there, including the Seal, Tang EV, Han EV, Yuan Plus EV, Song Plus DM-i, and Dolphin.
In July 2023, BYD announced plans to establish an enormous Brazillian production base complex in the state of Bahia. It will have three factories, including an electric bus and truck chassis plant, a new energy passenger vehicle plant, and a lithium iron phosphate (LFP) battery materials processing plant.
According to CnEVPost, the project development will get a total investment of R$3 billion ($620 million).
Such initiatives significantly accelerate BYD’s advancement in the electric vehicle industry. In fact, it successfully surpassed Tesla’s 484,507 BEV sales in the fourth quarter of 2023 with its 526,409 unit record. However, it must continue to strive in the highly competitive market.
Despite its remarkable feat in the fourth quarter, it remains behind Tesla in terms of full-year sales performance and revenue and profits.
