Chinese electric car manufacturer BYD is reportedly in talks with Brazilian lithium producer Sigma Lithium to secure materials for Electric Vehicle (EV) manufacturing. BYD, backed by Warren Buffett’s Berkshire Hathaway, recently surpassed Tesla in EV production and is investing $620 million in building its first electric car factory outside Asia in Brazil. BYD aims to establish an integrated supply chain in Brazil and has engaged in active discussions with Sigma Lithium about potential collaboration, which could include a supply agreement, joint venture, or acquisition.
Alexandre Baldy, BYD’s chair in Brazil, emphasized the ongoing nature of the dialogue with Sigma. He mentioned that various possibilities are under consideration, including discussions about supply, potential joint ventures, and the prospect of an acquisition. However, Baldy clarified that, as of now, none of these options have materialized into concrete plans. BYD is strategically positioning itself to secure a consistent and reliable lithium supply, a critical element for EV batteries.
BYD representatives reportedly met with Sigma’s CEO, Ana Cabral Gardner, in São Paulo last month, marking an evolving relationship that currently remains confidential. This potential move aligns with BYD’s broader international expansion plans, which include establishing an EV factory in Hungary and exploring opportunities in Mexico.
BYD’s strategic moves are under close observation amid global concerns over China’s quest for technological dominance and control over critical resources for clean tech industries. With the Biden administration seeking to reduce Chinese manufacturing in the US and Europe investigating China’s EV industry for alleged unfair competition, BYD’s actions are closely monitored on the international stage.
Sigma Lithium, despite posting a net loss of C$25.5 million in the first nine months of 2023, is a key player in Brazil’s lithium market. Sigma’s board is conducting a strategic review, contemplating a potential sale of the business or listing its Brazilian unit on Nasdaq and the Singapore Stock Exchange. Volkswagen and Chinese battery maker CATL have been mentioned as potential bidders, but neither company has confirmed or denied their involvement.
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