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Tesla Explores Entry into Chilean Market, Tapping into Lithium Reserves

Angela Beckham
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In a strategic move, Tesla Inc. has taken preliminary steps to establish operations in Chile, a nation boasting the world’s largest lithium reserves. The company recently registered Tesla Chile SpA, as confirmed by an entry in Chile’s official gazette on September 28. This registration grants the unit the authority to engage in various activities, ranging from the sale and fabrication of cars to endeavors related to the generation of energy and electricity.

While the registration signals intent, it doesn’t guarantee immediate execution of plans. Tesla is concurrently actively recruiting for three key positions in the capital, Santiago, including a country manager tasked with spearheading the market launch.

Earlier this year, a Tesla team visited lithium extraction sites and an energy storage project in Chile, focusing on sustainability aspects such as water usage, indigenous rights, and innovative technologies like Direct Lithium Extraction (DLE). Lithium, a vital component in electric vehicle batteries, has become a focal point for companies aiming to streamline extraction processes.

Chile’s electric vehicle landscape is evolving, with Tesla potentially joining the ranks of its biggest rival, BYD Co. The Chinese company recently introduced its Seal sedan in Santiago, part of a broader Latin American expansion plan. BYD’s presence in Chile extends to plans for a cathode factory, benefitting from preferential lithium prices granted by SQM.

However, Tesla and other electric vehicle manufacturers face hurdles in the region. Despite Chile’s lithium abundance and favorable renewable energy conditions, electric vehicles are approximately 2.5 times more expensive than their internal combustion counterparts, according to BloombergNEF. As of the first nine months of the year, EVs constituted a modest 2.5% of total vehicle sales in Chile, according to the country’s car association.

Interestingly, a search on Tesla’s website reveals job openings in both Mexico and Chile, signaling the company’s focus on South American expansion. Mexico’s President Andres Manuel Lopez Obrador previously announced Tesla’s plans to build a new plant in Monterrey, marking the company’s inaugural factory south of the U.S. border.

Chile, with its abundant renewable energy potential, possesses sun-drenched deserts in the north and strong winds in the south. Despite these favorable conditions, the nation faces challenges such as transmission bottlenecks and insufficient storage, impeding the full realization of its renewable energy aspirations. Read Similar Story

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