The industrialization of battery technology and volume production of advanced and sustainable batteries is at the heart of Volkswagen Group's in-house cell manufacturing strategy. In Europe, the group is planning to build six giga factories by 2030.
As a logical step towards vertical integration of the supply chain, the group is striking partnerships with different companies for a reliable and sustainable supply of raw materials. In this regard, Volkswagen AG has signed independent partnership agreements with Umicore and Vulcan Energy.
Umicore, a leader in clean mobility materials, plans to establish a joint venture with the German auto conglomerate to supply cathode materials to the latter's cell factories. Starting in 2025 with the initial production of 20 GWh for VW's gigafactory in Salzgitter, Germany, the JV's production capacity will be gradually ramped up.
Moreover, the joint venture also aims at jointly building up precursor and cathode material production capacities in Europe and securing sustainably sourced raw material capacities at competitive prices. Close cooperation to foster cost optimization activities and increase efficiencies in production processes are also on the agenda.
"We are very pleased to become a long-term partner for Volkswagen in achieving its ambitious e-mobility strategy in Europe and in bringing our long-standing and proven expertise in rechargeable battery materials to this unique joint venture," said Mathias Miedreich, CEO of Umicore.
"The complementarity of our extensive technology, innovation, and industrial know-how, will provide a strong framework to develop next-generation battery material technologies, giving us a considerable first-mover advantage in this fast-growing market", he added. Volkswagen AG and Umicore also target potentially including additional elements of recycling and refining into the scope of the joint venture at a later stage.
Other the other hand, Volkswagen AG has also signed another agreement with Vulcan Energy on the supply of CO2-neutral lithium from the Upper Rhine Valley in Germany. The binding contract focuses on providing lithium hydroxide over five years starting 2026. The product will contribute to securing VW demand for future in-house cell production both in Germany and Europe. Further aspects of a possible strategic partnership are under negotiation, the official statement said.
Managing Director at Vulcan Energy Francis Wedin observed, "Through this agreement, Vulcan Energy will become a major enabler of Volkswagen's world-leading target to produce carbon-neutral EVs, including all raw materials in the battery supply chain. We look forward to working closely with Volkswagen Group to build sustainable, local lithium supply for the German and European automotive sector."
Vulcan is currently developing a project to produce CO2-free lithium in the Upper Rhine Valley using a local and lithium-rich geothermal brine. Its zero-carbon lithium project aims to establish sustainable and regional sourcing of lithium from Europe's largest deposit.