BYD aims to acquire major lithium company to expand EV battery business

Leading Chinese EV maker BYD has entered into “active” talks with lithium producer Sigma Lithium to expand its battery business.

BYD continues to outperform Tesla in EV sales in the last three months of 2023. Chinese EV manufacturers are currently aiming to expand their EV battery business.

According to the newspaper, BYD’s head of Brazil, Alexandre Baldry, said there were discussions about a potential supply agreement, joint venture or acquisition of Sigma Lithium. financial times.

Last year, Sigma began shipping lithium from its Grota do Cirillo mine and processing plant in Brazil. The company started operating its crushing unit in December 2022 and was able to maintain production levels last month.

BYD, which started as a battery maker, has built a brand on affordable electric vehicles like the Dolphin and Yuan Plus, both of which can be purchased for less than $20,000 in China.

A large part of BYD’s success is due to its past. BYD is currently the world’s largest supplier of rechargeable batteries. The company also sells EV batteries, like the BYD Blade battery, to other automakers including Tesla, Toyota, Ford, and Kia.

North American CEO Stella Lee described BYD as “more of an engineering company” and manufacturing most components in-house. For example, BYD manufactures all parts of the Dolphin EV except for the tires and windows.

BYD focuses on Sigma’s lithium supply agreement

BYD’s ability to offer affordable EVs is largely due to the company’s control over its supply chain. A major lithium deal could help secure BYD’s position as the world’s top EV maker.

Sigma posted a net loss of $19 million (C$25 million) in the first nine months of production. First year of production. Revenues amounted to approximately $97 million (C$129.9 million).

Sigma Lithium (SGML) stock has fallen more than 35% in the past six months as top battery makers such as Panasonic lowered their profit estimates last year.

according to F.T.Sigma’s board of directors is considering a possible plan of action that could include a sale of the business or a listing of the Brazilian unit on the Nasdaq (or Singapore) stock exchange.

Brazilian media test Both Volkswagen and CATL are also reportedly eyeing Sigma’s assets. According to the report, China’s CATL offers more than VW.

according to bloomberg According to reports last year, Tesla was also considering acquiring Sigma. It was “one of several mines” that Tesla was exploring.

Sigma plans to triple its annual production capacity in 2024, shipping 22,000 tonnes of battery-grade lithium every month. This will be around 270,000 tonnes this year.

BYD launched its luxury brand Yangwang last year and continues to expand into new markets. BYD’s Yang Wei has unveiled his new U7 electric sedan with more than 1,000 horsepower, starting at around $140,000 (RMB 1 million).

The EV leader is also preparing to ship its EVs to Europe on its first transport ship. BYD Explorer 1 is the first Chinese-built ship designed to transport domestically produced EVs overseas.

The BYD ship arrived at Yantai port last week and will then head to Shenzhen, where it will load vehicles. Next destination is Europe. BYD’s Explorer No.1 can carry 7,000 EVs.