Volkswagen Struck Three Deals to Secure Raw Material Supply

Volkswagen announced three key partnerships to secure raw materials needed to reach its electric vehicle strategy. VW has been planning to invest 30 billion euros to build battery plants and purchase materials in order to catch up with rivals Tesla.

The most important of the three deals is a joint venture with Belgian chemicals company Umicore. The agreement plans to supply cathode materials to VW’s European battery cell factories, which the company aims to build by 2030. The production is expected to start in 2025 with 20GWh for the company’s plant in Salzgitter Germany.

By the end of the decade, the joint venture aims to reach a capacity of 160 GWh per year. That is enough to supply 2.2 million electric vehicles.

Volkswagen also signed a deal with Australia’s Vulcan Energy Resources to for the lithium extracted from Germany’s Upper Rhine Valley, through geothermal energy. The two companies said the initial agreement period is five years with deliveries to start in 2026.

The German automaker also invested in battery startup 24M, to develop production technology for its planned cell plants.

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