Hyundai Motor Group’s brands, Hyundai and Kia, have just teamed up with Chilean miner SQM Salar SA to secure lithium supply for electric vehicle batteries.
Hyundai, Kia lock in lithium supply as demand soars
Socedad Quimaica y Miners de Chile SA (SQM) subsidiary SQM Salar SA forged a long-term deal with Hyundai and Kia for lithium supply, according to a press release on Monday.
The South Korea automaker will source some of its future lithium hydroxide demand from SQM Salar SA. The decision apparently comes after Hyundai Motor Group considered the Chilean miner’s leading qualities, including “proven operational capabilities, extensive commercial and technical expertise, high quality standards and an environmentally sustainable and responsible production,” aligning with its growth plans.
SQM’s lithium hydroxide annual production output
SQM currently has an annual production capacity of 40,000 metric tons of lithium hydroxide, according to its Q1 2024 results.
For context, it initially extracts lithium carbonate in Salar de Atacama and then processes it into lithium hydroxide as a raw material for battery production.
The mining giant aims to further increase its output in Chile by up to 100,000 tons of lithium hydroxide as early as next year.
SQM also plans to boost its annual output in China and Australia.
Implication
The newly announced long-term partnership with SQM hints that Hyundai Motor Group is establishing a strong supply chain near the North American region.
The South Korean automaker has also started cutting its heavy dependence on Chinese supply by expanding its electric vehicle supply chain across the world.
Its efforts seem to be paying off, considering its recent advancements in the US market. In May, Hyundai and Kia managed to diminish the gap they had with market leader Tesla by 33%.
However, SQM has yet to disclose the quantity of lithium it will supply to Hyundai or its financial conditions.
