Volkswagen EV Production Boost: New Partnerships Announced

Volkswagen Forges New Battery Partnerships for EV Transition

Volkswagen is actively establishing three new collaborations centered around electric vehicle (EV) battery technology. This strategic move underscores the German automotive manufacturer’s commitment to transitioning its complete range of vehicles – encompassing cars, trucks, and SUVs – to zero-emission powertrains by the year 2040.

Strategic Alliances Announced

These three distinct partnerships, revealed on Wednesday, involve collaborations with Umicore, a materials technology group; 24M Technologies, a specialist in battery development; and Vulcan Energy Resources, a company focused on establishing a lithium brine project within Germany.

Umicore Joint Venture for Cathode Materials

Volkswagen’s joint venture with Umicore is designed to provide the automaker’s European battery cell production facilities with cathode materials, a crucial component in lithium-ion battery construction. Initially, the joint venture will possess a production capacity of 20 gigawatt-hours.

The ambition is to expand this capacity significantly, aiming for up to 160 gigawatt-hours by 2030. These materials will be directed towards VW’s forthcoming Gigafactory situated in Salzgitter, Germany.

Investment in 24M Technologies

Furthermore, Volkswagen announced an investment in 24M, a battery startup pioneering a battery design featuring a semi-solid electrode. This MIT spin-off asserts that its manufacturing processes are both quicker and require less capital investment compared to traditional lithium-ion battery production.

The specific amount of Volkswagen’s investment in 24M was not publicly disclosed.

Sustainable Lithium Supply with Vulcan Energy

The partnership with Vulcan Energy includes a binding agreement for the supply of what the companies term “carbon neutral” lithium, sourced directly from Germany. This claim of carbon neutrality stems from the environmentally conscious brine extraction process employed by Vulcan.

This process is designed to be more sustainable than conventional methods, and will be powered by renewable energy sources. Vulcan is slated to supply Volkswagen with lithium hydroxide for a period of five years, beginning in 2026.

Significant Investment in Electrification

These three agreements are integral to Volkswagen’s broader plan to allocate €30 billion ($34 billion) towards electric vehicle initiatives. The company intends to construct six battery gigafactories within Europe by the end of the decade.

These facilities will collectively boast a total production capacity of 240 gigawatt-hours.

Industry-Wide Shift in Battery Supply Chains

Volkswagen is not alone in its efforts to secure the battery supply chain. General Motors recently announced a similar joint venture with POSCO Chemical to establish a new cathode materials facility in North America, expected to be operational by 2024.

Stellantis also secured a lithium supply agreement with Vulcan Energy last month.

Reshaping the Global Battery Landscape

This surge in deals is significant, indicating an acceleration in automakers’ electrification plans. Moreover, these collaborations have the potential to reshape the global battery supply chain, lessening its reliance on China.

Currently, China dominates the manufacturing of both battery cathodes and anodes. According to Benchmark Mineral Intelligence, approximately 75% (148 out of 200) of planned lithium-ion megafactories are also projected to be located within China.