Major Chinese lithium producer Tianqi Lithium is investing in German automotive marque Smart to expand its business scope to the downstream end of the electric vehicle (EV) industry chain.
Tianqi plans to pay $150mn to acquire a stake in Smart, with the shareholding ratio undisclosed. The partnership will also include collaborations between the upstream and downstream of the new energy industry chain.
Smart Automobile, headquartered in Ningbo in east China's Zhejiang province, is a joint venture established by Mercedes-Benz and China's automaker Zhejiang Geely Holding in 2019, and aimed at producing Smart-badged cars in China to be marketed globally.
"The investment in Smart is the first time that Tianqi has established a link with the downstream end of the automotive industry chain," Tianqi said. It owns the Greenbushes mine in Australia, which is the world's largest and lowest-cost hard rock lithium mine with a resource of 12.86mn t of lithium carbonate equivalent. The firm currently has a capacity of 68,800 t/yr for lithium chemical products in China and Australia.
Smart has released two EV models in the past two years, with shipments amounting to 31,000 units in the first eight months of 2023 in China.
Tianqi has also signed unbinding agreements with Geely and Mercedes-Benz to establish co-operation in feedstock resources, core materials, lithium battery technology research, lightweight materials for new energy vehicles (NEV) and software technology development. The three companies aim to promote vertical integration of the lithium-ion battery industry chain. Geely shipped 694,000 NEVs in the first half of 2023, with 23pc of NEV penetration in its total vehicle sales.
Tianqi's investment in the EV downstream segment comes after global lithium prices have been falling this year in response to a slowdown in demand from the battery sector and rising supplies following output ramp-ups at producers.
