The move will help Volkswagen secure supplies as lithium demand doubles in four years
Volkswagen Group and Chinese manufacturer Ganfeng have signed a memorandum of understanding for long-term lithium supplies. Group board member for procurement Dr. Stefan Sommer said this was of “crucial strategic significance for implementing Volkswagen’s electric offensive”.
He added: “Over the next 10 years the Volkswagen Group will be launching 70-plus new pure electric vehicles. That means approximately a quarter of the vehicles we deliver in 2025 will be powered by electricity. Consequently, there will be a rapid increase in our raw material demand for cell production in the coming years. We must make sure we cover this demand at an early stage. Long-term agreements like the one for lithium, a key raw material, that we have just concluded with Ganfeng are therefore of crucial strategic significance for implementing our electric offensive.”
The rapid increase in vehicle electrification in the automotive industry will have a major impact on global raw material markets. The global lithium demand is expected to more than double by 2023. In light of this, the agreement with Ganfeng is an important milestone in supply security for the Volkswagen Group.
Head of corporate purchasing e-mobility at Volkswagen Aktiengesellschaft Michael Bäcker explained: “With Ganfeng as a strategic partner we are creating a secure basis for planning capacities and costs. The strategic collaboration is the result of an extensive market analysis executed by Volkswagen’s e-Raw Material Team. This specialised team is focusing on building close relationships with the raw material industry. Together with selected strategic partners, Volkswagen is identifying and establishing common synergies along the HV-battery value chain. During this process we consider a sustainable value chain as equally important to securing material capacities and competitive pricing structures.”
In addition to the arrangements on lithium supplies, Volkswagen and Ganfeng also agreed to cooperate on future topics such as battery recycling and solid-state batteries.