Chinese carmaker BYD and metals giant Tsingshan have abandoned plans to build lithium processing plants in Chile, local newspaper Diario Financiero reported on Wednesday.
BYD has already filed its withdrawal notice with the national assets ministry. Tsingshan, through its affiliate Yongqing Technology, informed Chile’s economic development agency Corfo that it will no longer pursue its lithium battery project. Corfo confirmed the withdrawal, noting that Tsingshan was not legally incorporated in Chile.
Both companies were selected by Corfo in 2023 as strategic investors to develop value-added lithium products such as cathodes and batteries. The deals included preferential pricing and guaranteed access to lithium carbonate from SQM —Chile’s state partner and the world’s second-largest lithium producer— until 2030. In exchange, the companies pledged to invest a combined $523 million in Chile and generate nearly 1,200 jobs.
A combination of plunging lithium prices, global market instability, and bureaucratic delays derailed both initiatives before contracts could be finalized.
BYD was the first to raise concerns. Diario Financiero reports that a year ago, the company flagged delays in securing land for its $290 million cathode plant in Antofagasta, which was expected to produce 50,000 tonnes of lithium iron phosphate (LFP) annually. The plant would have manufactured the most expensive component of an EV battery cell—the cathode. Corfo acknowledged the company’s concerns and said BYD had requested further information to reassess its plans.
BYD, best known for its affordable electric vehicles and in-house manufacturing capabilities, had aimed to anchor its production of LFP cathodes in northern Chile. Tsingshan, one of China’s largest private conglomerates, intended to invest $233 million in a battery facility in Mejillones, north of mining hub Antofagasta. Both projects are now officially shelved.
Chile’s current lithium strategy, introduced by President Gabriel Boric in 2023, requires companies like Albemarle (NYSE: ALB) and SQM (NYSE: SQM) to allocate a portion of their output at preferential rates to firms willing to invest in local lithium-based technologies.
While the withdrawal of BYD and Tsingshan marks a setback, Chile remains a central player in the global lithium market, second only to Australia in production.
