Umicore Will Supply Cathode Materials For Volkswagen Group

They will start from a volume sufficient for 20 GWh per year in 2025 and proceed forward, reaching up to 160 GWh by 2030.

Volkswagen enters into strategic partnerships for the industrialisation of battery technology

Mark Kane

By: Mark Kane

Dec 9, 2021 at 8:56am ET

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Volkswagen Group announced three independent battery-related strategic partnerships this week - with Umicore, 24M Technologies (see more here) and Vulcan Energy Resources.

The agreement with Umicore is about the supply of key materials for battery cell production at the group's gigafactories (six to be built in Europe by 2030).

According to the press release, Volkswagen and Umicore's joint venture will supply cathode materials for the Volkswagen Group's plants, starting in 2025 from a volume sufficient for 20 GWh of batteries per year. Initially the materials will be supplied to Volkswagen's first battery gigafactory in Salzgitter, Germany.

Let's recall that the group is developing all-new "unified cell" that will be used in almost all EVs produced by the group in the future.

The volume is expected to gradually increase and reach up to 160 GWh per year by the end of the decade, which would be equivalent to 2.2 million battery-electric vehicles according to the company. It would indicate an average battery capacity of nearly 73 kWh per pack.

"Volkswagen AG and Umicore, a leader in clean mobility materials, plan to establish a joint venture designed to supply Volkswagen AG’s European cell factories with cathode materials. For Volkswagen AG, this is the next logical step towards vertical integration of the supply chain, having already decided to set-up large-scale, in-house production of the unified cell.

The intention is to gradually ramp up the JV’s production capacity, starting in 2025 with initial production of 20 GWh for the Volkswagen gigafactory in Salzgitter, Germany. The ultimate goal is to reach annual production capacity of up to 160 GWh by the end of the decade or, in other words, an annual production capacity to power approximately 2.2 million BEVs."

Volkswagen partnership with Umicore

Vulcan Energy Resources will supply lithium

Besides the agreements with Umicore and 24M Technologies, Volkswagen Group entered into a supply agreement with Vulcan Energy Resource, which is expected to supply CO2-neutral lithium from the Upper Rhine Valley in Germany.

The lithium hydroxide will come from a local and lithium-rich geothermal brine, starting in 2026 (the contract is for 5 years).

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"The binding contract focuses on providing lithium hydroxide over a period of five years starting 2026. The product will contribute to securing Volkswagen demand for future in-house cell production both in Germany and Europe. Further aspects of a possible strategic partnership are under negotiation."

The new partnerships are another step towards vertical integration in the EV battery area, as the company continues its transformation towards 100% electric cars.

Volkswagen enters into strategic partnerships for the industrialisation of battery technology