SANTIAGO – U.S. electric car-maker Tesla is in talks with Chile’s largest lithium producer SQM about investing in supplies of the key battery material, officials say.
Eduardo Bitran, head of Chilean development agency Corfo, told Reuters on Monday that Tesla and SQM were “exploring” opportunities after Tesla expressed interest in buying “important volumes” of lithium hydroxide from SQM.
The Elon Musk-led carmaker could agree to build a processing plant in Chile to produce the high-quality lithium it needs for its batteries, Bitran added.
If successful, the deal would mark Tesla’s first foray into securing battery raw materials, which have soared in price due to the growing popularity of electric cars.
Global carmakers are starting to lock in supplies of raw materials as they scale up production of electric cars to meet ambitious targets. This month, Toyota’s trading arm agreed to buy a 15 per cent stake in Orocobre, which produces lithium in Argentina.
Santiago-based Sociedad Química y Minera de Chile (SQM) is one of the world’s lowest-cost producers of lithium. This month, the company resolved a long-running dispute with Corfo, which will allow the miner to quadruple lithium production by 2026.