Volkswagen's PowerCo in 3 bln euro JV with Umicore
JV to produce battery cathodes, probably in Poland
European automakers seek supply chains closer to home
BERLIN, Sept 26 (Reuters) - Volkswagen
announced on Monday a $2.9 billion battery parts joint venture
with Belgian materials firm Umicore, becoming the latest
European automaker to bring battery supplies closer to home in
the shift towards electric vehicles.
While raw materials - among them lithium, cobalt, nickel and
manganese - will still be largely sourced from across the world,
cathode production for batteries will take place in Europe under
the joint venture, most likely at Umicore's Poland plant.
The venture - between Umicore and Volkswagen's battery unit
PowerCo - also plan to collaborate on recycling metals from
battery materials, the firms said, without giving a timeframe.
Europe's automakers are scrambling to secure stakes in the
growing number of plants on the continent turning raw materials
into batteries as political pressure grows to bring the supply
chain, currently dominated by Asian players, closer to home.
Volkswagen is aiming for 70% of its sales in Europe to be
fully electric vehicles by 2030, and is increasingly trying to
fence in its supply chains by region to protect them from
geopolitical tensions and reduce transport costs.
But Europe's battery industry is still in its infancy, with
attempts to mine raw material in countries from Germany to
Portugal held up by red tape and recycling facilities unable to
develop at scale without the raw material on hand.
Under the 3 billion euro ($2.9 billion) joint venture, which
the companies flagged in December, Umicore will produce enough
battery precursor and cathode material for 160 gigawatt hours
(GWh) of battery capacity - enough for 2.2 million vehicles.
It will start with material for 40 GWh of capacity by 2026
at Volkswagen's first battery plant in Salzgitter, Germany. The
carmaker plans to build six battery factories in Europe
totalling 240 GWh of capacity by 2030.
There is a "strong industrial logic" to locating production
at Umicore's newly inaugurated battery materials plant in Nysa,
Poland, Umicore CEO Mathias Miedreich said, adding a decision
would be taken "rather quickly".
Umicore said last week it saw potential to increase the
capacity of the plant, which began production in July, to over
200 GWh in the second half of the decade, enough to power around
three million electric vehicles.
The companies also agreed that Umicore would refine cathode
material for the first 60 GWh of capacity.
Shares in the Belgian company plummeted in June after it
announced a 5 billion euro plan to bulk up its battery material
business, with analysts concerned about the higher debt and
external funding required amid rising costs.
($1 = 1.0366 euros)
(Reporting by Victoria Waldersee Editing by Jason Neely and