Volkswagen has signed a letter of intent with Ganfeng Lithium of Jiangxi province, China, to provide lithium to the OEM and its suppliers for the next ten years.
With the vehicle electrification boom expected to more than double lithium demand by 2023, the carmaker views the agreement with Ganfeng as an important milestone in supply security by meeting a significant share of its lithium requirements.
“Over the next ten 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,” said Stefan Sommer, group board member for components and procurement.
“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 such as the accord with Ganfeng are therefore of “crucial strategic significance for implementing our electric offensive,” he added.
Michael Bäcker, head of corporate purchasing e-mobility at the VW Group said collaboration with Ganfeng is the result of extensive market analysis by a specialised e-raw material team, which is building close relationships with the raw material industry.