Tesla is looking to secure lithium supply for its Gigafactory. Talks with Chile’s largest lithium producer, Sociedad Química y Minera de Chile (SQM), are on going. They may result in the development of a processing plant.
Tesla has turned to Chile’ s SQM in order to strike a deal that would guarantee Lithium supply for the Gigafactory while also putting the South American country on the map for raw material supply. SQM wants to quadruple its output by 2026.
News of the talks came from the executive vice-president of Chilean development agency Corfo, Eduardo Bitran, who told the Financial Times that “being close to Chile or having a strategic alliance in Chile becomes a strategic factor for a company like Tesla.”
The Californians are indeed not alone in their rush for raw supplies from the region. Toyota recently cut an exclusive deal with Orocobre, a mining company that is extracting lithium in Argentina (we reported).
For Chile, a deal with Tesla may result in plants being established. However, neither Tesla nor SQM has commented on the alleged deal.
To date, most of the batteries for Tesla have been coming from Japan, where Panasonic handles the supply chain and reportedly runs five lithium production facilities. Only with the Gigafactory in operation in Nevada, Tesla is becoming more involved in securing supply.