[News] BYD and its strategy to put Chile at the center of the lithium added value chain

[FNX Magokiler]

Good and happy Thursday! My vacation is almost there and it's already feeling like the 18th. Empanadas, pebre and cuecas. My focus is always on empanadas and pebre. I do little to the cueca.

During the week my WhatsApp exploded with comments about the interview that the president of the Central Bank, Rosanna Costa, gave to the Diario Financiero post-IPoM, in which she recognized that “this recent rise (of the dollar) has gone beyond what was contemplated in the projections” of the Council. Costa warned that the rise of the dollar will have an impact on the pace at which inflation is falling.
The rise of the North American currency against the peso, this last month, is generating concern in the market and is a topic in the halls of Chile Day in London, where this Wednesday the Minister of Finance, Mario Marcel, said that the stabilization of the economy Chile is almost complete, emphasizing that the annual inflation rate is almost a third of what it was in 2022 and that in 2023 the economy would be growing “above its level a year ago.”
The causes and dangers. The rate differential with the United States – where inflation is still a threat – and the Chinese slowdown – which hits the price of copper and which seems to be more structural than something temporary – puts downward pressure on the Chilean peso, and this could become in an unanticipated threat to that stabilization of the economy that Marcel spoke of in London.
For the chief economist of Scotiabank, Jorge Selaive, an exchange rate almost at $900 should make the Treasury rethink its policy of selling dollars and the Central Bank should already be thinking about taking containment measures.

Stella Li is one of the most powerful executives in China. BYD's executive vice president is the one who manages the business in the United States, Canada and Latin America and, in practice, is the company's number two.

She is betting on Chile to “build the largest lithium value-added chain in Latin America.” In mid-August it announced an investment of US$290 million to build a lithium cathode factory in northern Chile and, in parallel, it is making a strong commitment to electromobility with the launch of BYD Auto Chile, which joins its strong presence in the electric bus market and its plans to enter the storage business.

 

What is produced in Chile will be used in the electric car factories that are being built in Brazil. In August I was part of a delegation that visited BYD and Shenzhen, China, as part of an invitation. There I was able to talk with the executive about her plans and challenges to continue growing in Chile.

She said that the Government has to be bolder to promote the energy transition and electromobility, she is optimistic about the future of lithium and has plans to continue investing, but she regretted that she has not yet been able to meet with President Gabriel Boric. Among her suggestions is to lower the VAT for electric cars and for the State to bet on a national network of electric battery chargers.
-BYD has been very optimistic about Chile and lithium. He announced a major investment and talks of plans to develop and build a factory. Why are they so optimistic if Chile is still debating what they are going to do with the exploitation and production policy?

-Actually, BYD is a company with a lot of patience. And a more important reason is that we have very good clients in Chile and we have already had a lot of success. As you know, Chile is the first country in which we introduced the first 200 electric buses to the market. The company has been operating for five years and the data results are very successful. This increases the confidence of our customers.

The same customer, METBUS, has already made a new purchase. By the end of the year we will have nearly 1,000 electric buses operated by a single private bus operator. So this is trust. It is not from the Government, but from private operators. They believe in this technology, they trust this. We hope that history can be repeated in other sectors, for example, in the mining industry, in the taxi industry. And then we hope that the Government can offer more incentives for battery charging infrastructure.

 

https://www.elmostrador.cl/el-semanal/2023/09/14/byd-y-su-estrategia-para-poner-a-chile-en-el-centro-de-la-cadena-de-valor-agregado-del-litio/