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August 23, 2022

Mercedes-Benz signs MoU with Canada on EV value chain resources

MoU designed to advance opportunities for Mercedes across Canada's electric vehicle supply chain, including securing sustainable sources of raw materials

By David Leggett

Mercedes-Benz Group AG and the Government of Canada have signed a Memorandum of Understanding (MoU) to explore deeper cooperation across all stages of the automotive value chain – from technical development and the extraction of raw materials, to production, service life and recycling. 

The purpose of the MoU is to promote cooperation and to explore ways to advance opportunities across Canada’s electric vehicle supply chain, including, but not limited to securing sustainable sources of raw materials.

Mercedes-Benz is preparing to go all-electric by the end of the decade, wherever market conditions allow. With mass electrification of the automotive sector, demand will increase for specific and responsibly sourced raw materials, in particular cobalt and lithium, as well as nickel, graphite, manganese and copper.

Mercedes-Benz is also exploring a strategic partnership with Rock Tech Lithium Inc., which could allow the brand with the three-pointed star to supply its vendors with lithium hydroxide to meet global demand for battery electric vehicles. From 2026 onwards, as part of this envisaged partnership, Rock Tech intends to supply Mercedes-Benz and its battery partners with up to 10,000 tonnes of lithium hydroxide annually, starting with a qualification period.

“Mercedes-Benz is looking to open new ways to responsibly acquire raw materials to rapidly scale up electric vehicle production. Securing direct access to new primary and sustainable sources of raw materials is a vital step down this road. With Canada, Mercedes-Benz has a strong and capable partner to break new ground for a new era of sustainable transformation in the automotive industry,” said Markus Schaefer, Member of the Board of Management of Mercedes-Benz Group AG, Chief Technology Officer, responsible for Research & Development and Procurement.

“I welcome that Mercedes-Benz and Canada have signed a Memorandum of Understanding on battery value creation today. This is excellent proof that the cooperation with our close friends and allies in Canada is further deepening also in the context of raw material security and may encourage other companies to follow,” said Olaf Scholz, Federal Chancellor of the Federal Republic of Germany.

“Canada is quickly becoming the green supplier of choice for major auto companies, including leading European manufacturers, as we transition to a cleaner, greener future. By partnering with Mercedes-Benz, Canada is strengthening its leadership role as a world class automotive innovation ecosystem for clean transportation solutions. Canada is committed to building a strong and reliable automotive and battery supply chain here in North America to help the world meet global climate goals,” said the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry.

As part of Mercedes-Benz’s “Ambition2039”, the focus is on the reduction of CO2 emissions as well as the responsible use of resources along the entire supply chain. In close cooperation with its suppliers the Stuttgart-based luxury carmaker with the three-pointed star is working on finding levers for the consistent reduction of CO₂ as well as seeking to significantly reduce the amount of rare earth metals per electric drive.

“To scale up mass production of electric vehicles we need access to raw materials. With the intended Rock Tech-partnership we are diversifying the sourcing of our raw materials as part of a direct sourcing approach to secure the lithium supply for Mercedes-Benz battery production in Europe,” said Gunnar Guethenke, Vice President Procurement and Supplier Quality of Mercedes-Benz AG. “As sustainability is a central pillar of our Mercedes-Benz purchasing strategy, we appreciate that Rock Tech plans to supply Mercedes-Benz with lithium from mining sites audited to the standard of IRMA and processed with renewable energy sources.”

The intended agreement marks a decisive step for the supply of high-quality lithium to be processed in Germany, Mercedes said. With the envisaged strategic partnership with Rock Tech, Mercedes-Benz is expected to advance localisation of European production of battery cells. This significant amount of lithium sourced directly from Rock Tech could – together with additional partnerships in the future – will help the Stuttgart-based carmaker achieve its ambitious electrification goals.

“With the envisaged agreement, we intend to provide Mercedes-Benz not only with high-quality lithium hydroxide, but also to establish a strategic partnership that is expected to set new standards in sustainable supply chains. We are very pleased to have found a partner that intends to take important steps with us towards a more resilient and sustainable lithium supply chain to deliver an important part of their strategy and of the e-mobility transformation” said Markus Bruegmann, Chief Executive Officer of Rock Tech Lithium Inc.

Rock Tech Lithium, a cleantech company with operations in Canada and Germany, can help tap new sources of raw materials. Subject to an agreement and if quality and sustainability benchmarks are met, Rock Tech will play a key role in helping Mercedes-Benz to mass produce zero-emission vehicles. As one of several partners, Rock Tech is expected to supply the world’s most valuable luxury automotive brand with high quality lithium, which is planned to be refined in a CO2 neutral manner in Guben, Brandenburg (Germany). At this location Rock Tech Lithium is currently building Europe’s first lithium hydroxide converter with a planned investment volume of several hundred million Euros. With its long industrial tradition and existing infrastructure, the region offers the best conditions for becoming a central component of the battery value chain. 

In addition to achieving CO2 neutral production of lithium hydroxide by the end of 2030, Rock Tech Lithium has offered to supply Mercedes-Benz with lithium from mining sites audited to the mining standard of the Initiative for Responsible Mining Assurances (IRMA). Responsibly mined and processed raw materials provide the foundation for a sustainable all-electric Mercedes-Benz vehicle fleet. Respect and protection of human rights as well as of the environment are decisive criteria for choosing sourcing partners.

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