Stellantis and Vulcan Energy Resources have signed a binding agreement for Vulcan to supply battery grade lithium hydroxide in Europe for use in electrified vehicles to the Stellantis Group.

The five-year deal calls for shipments to begin in 2026.

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The Vulcan supply agreement is a part of the Stellantis electrification strategy, detailed during the EV Day presentation in July, 2021, to guarantee adequate availability of key raw materials for EV battery packs.

Stellantis plans to invest more than EUR30bn (US$34bn) through 2025 in electrification and software development, while targeting to continue to be 30% more efficient than the industry with respect to total Capex and R&D spend versus revenues.

“Stellantis is moving forward on its electrification strategy with speed and power,” said Stellantis chief Purchasing and Supply Chain officer, Michelle Wen.

“This agreement is further proof we have the competitive spirit to deliver on our commitments. Safe, clean and affordable freedom of mobility represents a strong expectation of our societies and we are committed to deliver on that matter.”

Stellantis targets more than 70% of its vehicle sales in Europe and more than 40% of vehicle sales in the US will be low emission vehicles (LEV) by 2030. Each of the company’s 14 vehicle brands is committed to offering fully electrified solutions.

Vulcan’s Zero Carbon Lithium Project in the Upper Rhine Valley in Germany, uses geothermal energy to produce battery-quality lithium hydroxide from brine without the use of fossil fuels and minimal water usage, reducing the generation of carbon in the battery metals supply chain.

“The definitive off-take agreement with Stellantis aligns with our mission to decarbonise the lithium ion battery and electric vehicle supply chain,” added Vulcan MD, Francis Wedin.

“The Vulcan Zero Carbon Lithium Project also intends to reduce the transport distance of lithium chemicals into Europe and our location in Germany, proximal to Stellantis’ European gigafactories, is consistent with this strategy.

“We look forward to a long and productive relationship between Vulcan and Stellantis, as we work to achieve our shared sustainability and decarbonisation ambitions.”

Vulcan will supply Stellantis with a minimum of 81,000 metric tons and a maximum of 99,000 metric tons of lithium hydroxide during the five-year term of the agreement.

The supply agreement is subject to the successful start of commercial operations at the Vulcan facility and full product qualification.