Taking on Tesla, Volkswagen Group bulks up on batteries and raw materials
Producing EVs in volume involves more than just building Gigafactories. Tesla has long understood the need to build new supply chains, including major battery manufacturing capacity and secure sources of raw materials. The Volkswagen Group is one of the few legacy automakers that’s also acting on this imperative—it recently raised its planned investment in EV and self-driving technologies to 73 billion euros ($86 billion) over the next 5 years, and announced 3 new battery-related initiatives.
Above: Standing in front of Volkswagen's ID.3, Tesla's Elon Musk looks over the shoulder of VW CEO Herbert Deiss (Linkedin: Herbert Deiss)
Cathode materials from Umicore
The Giant of Germany plans to establish a joint venture with Belgian-based materials group Umicore, which will build precursor and cathode material production capacity in Europe to supply VW’s battery cell production.
The companies plan to gradually ramp up the JV’s production capacity, starting in 2025 with an initial annual production of 20 GWh for Volkswagen’s plant in Salzgitter, Germany, and growing to an annual capacity of up to 160 GWh by the end of the decade—enough for around 2.2 million EVs.
“Volkswagen is implementing its battery strategy very consistently and at a high pace,” said Thomas Schmall, CEO of Volkswagen Group Components. “The Volkswagen unified cell must be at the forefront of performance, costs and sustainability right from the start. Teaming up with Umicore enables us to establish a state-of-the-art supply chain in Europe, as we share common values such as responsible sourcing of raw materials, as well as closed-loop thinking.”
“As a leader in clean mobility materials, we are committed to support our automotive and battery-cell customers with their electrification strategies,” said Mathias Miedreich, CEO of Umicore. “Our extensive technology, innovation and industrial know-how, and shared sustainability convictions will give us a considerable first-mover advantage.”
Above: Inside Volkswagen's recent partnerships to evolve its efforts in the EV space (YouTube: The Tesla Domain)
The two companies will collaborate on the sustainable sourcing of raw materials—a strong area of expertise for Umicore—and aim to eventually add elements of refining and battery recycling to the scope of the JV.
Lithium hydroxide from Vulcan
The Electrification Engine of Europe has signed a binding lithium hydroxide supply agreement with Vulcan Energy Resources.
The Volkswagen Group plans to establish six battery gigafactories in Europe with a total production capacity of 240 GWh by the end of the decade. The Group has agreed to purchase between 34,000 and 42,000 tons of battery-grade lithium hydroxide from Vulcan over the 5-year term of the agreement. Commercial delivery is to begin in 2026.
Vulcan’s Zero Carbon Lithium Project will produce battery-quality lithium from its combined geothermal energy and lithium resource in Germany, which the company calls Europe’s largest lithium resource.
Next-gen batteries from 24M
The Wonderful Wizards of Wolfsburg have formed a strategic partnership with 24M Technologies to manufacture next-generation lithium-ion batteries based on 24M’s SemiSolid platform, for use in VW’s EVs. VW will make a strategic investment in 24M, and will establish a wholly-owned subsidiary that will cooperate with 24M to develop SemiSolid cell production technology.