Chile In Talks with Tesla Motors Inc. for New Lithium Venture To Power Electric Car Batteries

Tesla Motors met with Chilean authorities to discuss a possible partnership between the American electric vehicle maker and Codelco in the former's lithium venture.

The U.S. automotive company is considering manufacturing their top-of-the-line vehicles powered by lithium car batteries, Reuters reported Thursday.

Because Chile has one of the world's largest deposits of the chemical, senior executives of the company decided to convene with the state company, which Electrek presumed is intended to supply Tesla's Gigafactory which is currently being constructed along the Electric Avenue in Sparks, Nevada.

A company executive described the project to be to 40 percent bigger than the expected 10 million square feet with the currently projected 13.6 million square feet, based on a previous Electrek report.

According to Tesla's official website, the new Gigafactory is aimed at producing 500,000 lithium battery-powered cars per year until 2020.

"The Tesla Gigafactory was born of necessity and will supply enough batteries to support our projected vehicle demand," Tesla explained.

Production of lithium car batteries are said to begin by 2017, pegging the Gigafactory at full capacity by the year 2020, its name taken from the company's goal of having an annual battery production capacity of 35 gigawatt-hours (GWh) --"giga" representing "billions."

If this is true, it would imply that the American electric vehicle manufacturer is trying to push for a higher lithium supply globally.

"A deal with Codelco would mean a third agreement for a project still under-development, which clearly shows that Tesla is trying to encourage new lithium projects in order to increase global supply rather than sourcing from established producers," Electrek explained.

However, the outlet noted that while the company is the top copper miner in the world, it currently does not operate a lithium mine to accommodate the American company, according to local news from Pulso cited in Mining Press.

Aside from that, a statement from Codelco revealed that there have not been any agreements made as of yet.

"A formal process for exploring for lithium has not started, nor has the board even taken a decision on that," the statement read.

Reuters notes that since the price of copper in Chile seem to be dropping for six years now, being presented with a new opportunity may be tempting.

Unfortunately, Coldelco executives are not very positive that it would be a good venture considering the size of the lithium industry in the country.

The U.S.-based company was not available for comment as of the writing of this article.