The recession in the global lithium and battery materials markets has finally hit home in China, with BYD, the world’s biggest maker of electrified vehicles, postponing a key project slated for Chile.

BYD had plans to produce lithium cathodes for electric vehicle (EV) batteries in Chile by 2025, in a key development that would use the lithium carbonate produced from the country’s huge brine-based industry, presently dominated by local player SQM and Albemarle of the US.

The decision is significant because BYD is the world’s second-largest battery maker after another Chinese company, CATL. The Chilean cathode plant would have been a major investment for BYD outside China.

BYD’s Americas head told Reuters in an interview on Tuesday that the plans were off for the time being and could not say if and when the project would start. Chile’s economic development agency CORFO last year said production at a new plant to be developed by BYD was expected to begin around the end of 2025, representing a $US290 million investment in the world’s second-largest lithium-producing country.

BYD Chief of Americas Stella Li said she was unsure when the company would resume its plans, citing uncertainty and complications around the project, which would make components needed for electric vehicle (EV) batteries. “That plan has been postponed because there is a lot of uncertainty,” Li said in an interview in Mexico City at the launch of BYD’s new hybrid-electric pickup truck called the Shark.

The BYD plant, planned for the northern region of Antofagasta, was expected to produce 50,000 tonnes per year of Lithium iron phosphate for battery cathodes.