In a significant move for the electric vehicle (EV) industry, Chilean lithium miner SQM announced on Monday a long-term supply agreement with South Korean automakers Hyundai and Kia. This deal is poised to secure a steady supply of lithium hydroxide, a crucial component for EV batteries, for the two car manufacturers.
Under the terms of the agreement, Hyundai and Kia will source a portion of their future lithium hydroxide needs from SQM. While the financial details of the deal were not disclosed, SQM emphasized its commitment to expanding its lithium hydroxide production capabilities.
Currently, SQM’s lithium hydroxide production capacity in Chile stands at 40,000 metric tons per year, according to the company’s first-quarter results. However, SQM is on a strategic path to increase this output significantly, aiming to reach 100,000 tons by 2025. This ambitious expansion plan highlights SQM’s role as a critical player in the global EV supply chain.
In addition to its Chilean operations, SQM is also enhancing its production capacities in China and Australia. This global expansion effort underscores the company’s strategy to meet the growing demand for lithium hydroxide driven by the rapid adoption of electric vehicles worldwide.
This agreement between SQM and the Korean automotive giants marks a pivotal step in ensuring a reliable supply of essential materials for EV batteries, reinforcing the ongoing shift towards sustainable transportation solutions.
