Vulcan Energy Resources (earlier post) has signed a binding lithium hydroxide offtake agreement with the Volkswagen Group. The Group comprises ten brands from five European countries: Volkswagen, Volkswagen Commercial Vehicles, ŠKODA, SEAT, CUPRA, Audi, Lamborghini, Bentley, Porsche and Ducati.
In Europe alone, the Group plans to establish six gigafactories with a total production capacity of 240 GWh by the end of the decade. Volkswagen Group is to purchase a minimum of 34,000 tonnes and a maximum of 42,000 tonnes of battery-grade lithium hydroxide over the duration of the Agreement.
The Agreement is for an initial five-year term and the start of commercial delivery is set for 2026. Pricing will be based on market prices on a take-or-pay basis.
Volkswagen Group and Vulcan have also agreed to a first right of refusal to invest in additional capacity in the Zero Carbon Lithium Project. Conditions precedent include successful start of commercial operation and full product qualification.
Volkswagen is implementing its battery strategy very consistently and at a high pace. The Volkswagen unified cell must be at the forefront of performance, costs and sustainability right from the start. With our new partners, we are taking the next step closer to this goal. Together, we will approach key parts of the battery value chain and develop cutting-edge technologies.—Thomas Schmall, Member of the Board of Management of Volkswagen Group for Technology and CEO of Volkswagen Group Components
Vulcan aims to become the first lithium producer with net-zero greenhouse gas emissions. Its Zero Carbon Lithium Project intends to produce a battery-quality lithium hydroxide chemical product from its combined geothermal energy and lithium resource, which is Europe’s largest lithium resource, in Germany.