Lithium Australia (ASX:LIT) has reported its execution of an exclusive agreement with China’s BYD Auto to recycle all EV batteries at their end-of-life in Australia.
The deal covers both full battery EVs and hybrids from BYD. The Chinese company entered Australia’s relatively smaller EV market in 2022; it now has a market share around 14% per LIT’s analysis.
Lithium Australia expects the deal to significantly scale up the company’s large-format L-ion battery collection volumes “given the scale of BYD Auto.” The company reported on Wednesday it remains focused on inking recycling agreements with leading manufacturers.
LIT will receive a service fee from BYD for collecting the EV batteries at their end-of-life; the company noted on Wednesday BYD’s batteries are lithium iron-phosphate (LFP) type batteries – which Lithium Australia described as a “major advancement in New Energy vehicles.” Perhaps the deal was reliant on them advertorialising for BYD.
“We are excited to announce the signing of an exclusive recycling agreement with BYD, the global leader in New Energy vehicles,” LIT CEO Simon Linge said.
“This milestone achievement is expected to significantly increase our future collection volumes of large-format lithium-ion batteries (LIBs), further accelerating the Company’s shift in battery collections mix to be primarily focused on the higher margin large-format LIBs.
“The signing of this milestone agreement, alongside the various other exclusive recycling agreements announced in recent times, are evidence of our successful execution of the Company’s recycling growth strategy.”
This isn’t the first time the company has struck a deal with a household name (or something close to it.) It inked a similar deal with LG Energy back in 2022.
Notably, for a lithium player, the strategy could work. LIT posted its maiden profit in FY24; it provided guidance today that operations continue to achieve cash profits in FY25 (so far, at least.)
LIT last traded at 2cps.