In the wake of a booming global electric vehicle (EV) market, Chinese EV titan BYD Co Ltd (OTC:BYDDY) (OTC:BYDDF) is rumored to be holding negotiations with Brazilian lithium producer Sigma Lithium Corp (NASDAQ:SGML), indicating a possible acquisition.

What Happened: BYD, the globe’s leading EV producer, has engaged in discussions regarding a possible takeover of Sigma Lithium, which has a market value of $2.9 billion. Alexandre Baldy, the head of BYD's operations in Brazil, acknowledged the ongoing talks, suggesting outcomes could range from a supply contract, a joint venture, or even a full acquisition, according to a report by Financial Times.

Sigma started exporting lithium, a crucial component for EV batteries, from its mining and processing facility in Minas Gerais, Brazil last year. At present, the lithium producer is undergoing a strategic review that could result in a sale or the public listing of its Brazilian subsidiary on the Nasdaq and the Singapore Stock Exchange.

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BYD, backed by Warren Buffett‘s Berkshire Hathaway Inc. (NYSE:BRK) (NYSE:BRK), is increasing its international presence, setting up its inaugural electric car factory outside Asia in Brazil. The firm’s interest in Sigma is in line with its strategy to oversee a significant part of its supply chain, encompassing mines, batteries, and computer chips.

The move has sparked apprehensions over China’s plans for technological supremacy and control over global resources vital to clean tech industries as Chinese EV and renewable energy corporations seek to grow internationally.

Why It Matters: In February last year, BYD was planning to invest $1.2 billion in a new battery production facility in China. The Chinese EV maker's battery unit, FinDreams Technology, was eyeing building a facility with the capacity to produce 40-gigawatt hours per year of its Blade Battery in Henan’s Zhengzhou city.

The development came after BYD had outpaced Tesla Inc (NASDAQ:TSLA) for the first time in battery-only EV sales, having produced more than 3 million new EVs in 2023.

Meanwhile, BYD also reportedly launched its inaugural chartered cargo ship, marking a significant step in the expansion of its global electric vehicle exports.

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