VW said this Wednesday, December 8, that it signed three alliances with different companies with the aim of ensuring a good part of the raw materials it will need in the next decade. Volkswagen’s marketing strategy is working fully.
The German company seeks to lead (as its rivals are trying) the electrical transformation and for that it wants to consolidate its vertical integration before the rest.
It’s an ambitious $ 34 billion Volkswagen marketing strategy that has, for now, only one competing competitor: Tesla.
Volkswagen, marketing and alliances
The largest of the three agreements signed aims to build battery plants and buy materials in advance in alliance with a Belgian chemical and recycling company called Umicore.
Umicore, with which Volkswagen will form a joint firm, is one of the main suppliers of cathode materials for Volkswagen’s European battery cell factories.
Production will start in 2025 with 20 gigawatt hours (GWh) for the VW plant in Salzgitter, Germany. This factory will be built in partnership with Gotion High-tech, from China.
In five years, the goal is to reach a manufacturing capacity of up to 160 GWh per year, a capacity that will be enough to supply batteries to some 2.21 million electric vehicles.
In order not to neglect the environmental aspect, a later step of the agreement talks about including the refining and recycling of batteries.
Volkswagen’s other key partnership is with Vulcan Energy Resources, a company dedicated to extracting lithium from Germany’s Upper Rhine region using geothermal energy.
The agreement has an initial term of five years with commercial delivery starting in 2026, they said from Volkswagen and Vulcan, without giving further details of the agreement.
The step is clear: to ensure the vital raw material for batteries that are, in turn, the most important part of electric cars.
Finally, Volkswagen will also invest in research in the field of 24M solid and semi-solid state batteries, in association with a spin-off of the Massachusetts Institute of Technology.