Tesla Eyeing Chile’s Lithium Reserves, In Talks With SQM

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Tesla is now in talks with the Chile-based lithium mining firm SQM about the sourcing of further supplies — with the electric vehicle manufacturer reportedly interested in “important volumes,” according to industry figures.

To be more specific, the head of Chile’s development agency Corfo, Eduardo Bitran, was quoted by Reuters as saying that Tesla and SQM were “exploring” various possibilities following from interest being shown by Tesla.

This news isn’t particularly surprising, as Tesla will need to secure new lithium supplies if it is going to continue expanding at the rates that it’s targeting. Chile’s Atacama desert region is of course home to some of the largest concentrated lithium reserves in the world.

Reuters provides more: “Which is why, of course, Tesla is so interested in cutting its own lithium supply deal at its source in the Atacama desert. … Competition for units, meanwhile, is only going to become more intense as ever more automotive companies take their EV pledge. So far none, according to Benchmark Minerals, has actually locked in long-term contracted lithium supplies.

“The current market battle is playing out between lithium producers and battery-makers. The end-users, the car companies themselves, have so far been largely by-standers. That looks set to change. And it’s perhaps no surprise that Tesla, the self-acclaimed standard bearer of the electric future, is leading the way.”

In other words, Tesla’s decision to focus on the manufacture of “its own” battery cells (in close partnership with Panasonic, that is) is looking increasingly astute. The company seems to have created a major advantage for itself in the electric vehicle and energy storage sectors by doing so — with most other manufacturers facing an increasingly tight lithium market over the coming decade or so, it seems, and possibly reliance upon too many middle men.

Image: Tesla Model S battery components, by Visual Capitalist and Red Cloud Klondike Strike

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James Ayre

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

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