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The Story of China’s Jump on the U.S. in the Lithium Triangle
The first thing to know is that Chinese companies have shown up in Argentina
Last month, the CEO of China’s Jiankang Auto showed up in the Argentine capital of Buenos Aires to follow up on a big deal he had signed — for an ongoing supply of battery-grade lithium for China’s insatiable electric vehicle industry. A few weeks later, BMW signed its own deal for Argentine lithium, a $334 million agreement for supply starting next year.
But Argentina, part of an oblong-shaped triad of Latin American countries possessing about two-thirds of the planet’s lithium, is no longer satisfied being the mere object of supply-desperate countries and companies out to win the global electric vehicle race. It wants to be a bigger player, and it is leveraging its lithium to get there.
The goal: to make Argentina a hub for the manufacture of lithium-ion batteries and EVs for the South American market, Matias Kulfas, the country’s minister of production, told me in a video call to Buenos Aires last night. “We don’t want Argentina to be left out of the process,” Kulfas said, “because we know Argentina is in a position to hold an important place in the process.”
Argentina’s posture is instructive. About mid-decade, automobile economists expect the sticker price of EVs to drop to parity with gasoline-driven vehicles, and for that to help to finally trigger a boom in the sale of electrics. Automakers expect their sales to begin to take off in the second half of the decade, and to rise from there.
Ahead of that bonanza, companies and countries are scouring the Earth for raw material — a supply chain to make batteries. Until recently, China — by far the most aggressive player in EVs and lithium-ion batteries — had managed to snag massive long-term contracts for cobalt, nickel and lithium, all-but locking up the supply in important mining countries for these strategic battery metals. But now, in exchange for its lithium, Argentina suggests a possible hardening of the bargaining position in the extractive countries: Going forward, they seem likely to demand a far greater part of the value chain.
Argentina also demonstrates the persistent state of play: It has the…
