China’s BYD could invest billions in Chile lithium supply chain, says regional chief

Chinese electromobility giant BYD could potentially invest billions of dollars in Chile to help the country build a battery materials supply chain, a company chief told BNamericas.

China’s biggest electric vehicle manufacturer by domestic sales, BYD is not only seeking the green light from Chilean authorities to advance with a lithium cathode plant, but is also looking to invest in a domestic lithium mining project to secure offtake. 

Officials are engaged in associated talks with the public and private sectors and are ready to deploy capital, said Stella Li, executive VP of BYD and president of BYD América. BYD also operates in the battery storage, solar panel and rail transport sectors, and is heavily involved in R&D.

Li, in Chile, to attend the opening of the country’s first electric car dealership, in capital Santiago, said supply chain investment could surge: “The number can be as big as billions, but it’s really dependent on how government can speed up the process.”   

On the lithium cathode plant, Li (pictured) said: “BYD wants to build a value-added process here; we can commit the capital investment. We need to wait for government approval. BYD really believes in Chile and we can do a lot of work here.”

Only two companies are currently authorized to extract lithium in Chile: local firm SQM and US player Albemarle. The government of President Gabriel Boric wants to create a state lithium company and in January officials are due to submit an associated bill. Chile has the biggest lithium brine reserves in the world and is the second-biggest producer of the soft metal after Australia. 

Demand stemming from the global energy transition is expected to spur investment in copper and lithium projects over the coming decades. Globally, there is competition between players – chiefly from the US, Europe and China – to secure supplies of energy transition minerals and Latin America is a key arena.  

China is currently the world leader in electromobility. During a recent conference organized by Fundación Chilena del Pacífico, a public-private organization tasked with supporting Chile’s economic insertion into the Pacific Basin, China’s ambassador to Chile, Niu Qingbao, said, “[Chile] has abundant lithium resources and China is the largest manufacturer of electric vehicles. This alliance not only benefits Chile's mining sector but also helps the climate and the environment. We want to expand cooperation in this area.”

Li, meanwhile, said dual objectives in Chile were building a supply chain footprint and granting the government rights to use BYD technology free of charge. “We want to bring our technology here, to help Latin American countries, especially Chile, to develop this advanced technology, to develop lithium,” Li said.

BYD – which stands for “build your dreams” – operates in more than 400 cities in over 70 countries. After setting up shop in Chile in 2014, BYD, in partnership with a local unit of Italian utility Enel, introduced Santiago’s first electric bus in 2016. The city’s electric bus fleet is now the biggest outside China, with around 435 BYD units among those in circulation. The fleet is expected to double next year to around 1,900. 

The company is also urging the Chilean government to introduce a guarantee scheme to support investment in electric taxis. Under current policy, new light vehicles and urban public transport must be zero-emissions by 2035. A challenge is to reduce unit costs – expected to fall in lockstep with declining battery prices – and building out charging infrastructure. Li urged the government to accelerate electrification plans. “The industry is ready,” she said. “Let’s move.”

Chile’s battery storage segment, which is poised to expand following approval of an associated bill and amid pressure to mitigate the intermittency of renewables plants, is also blinking brightly on BYD’s local energy transition radar. 

Energy minister Diego Pardow last week announced an energy storage auction for 2023. 

BYD, which has more than 30 plants globally, reported revenues of US$35.5bn in 2021, up from US$7.75bn in 2011.

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