VW moves to secure cobalt supplies for EVs - report

By Dave Leggett | 26 September 2017

Volkswagen is reportedly taking steps to secure long-term supplies of cobalt, a key constituent of batteries, as it plans a big push into electrified cars in the 2020s.

Cobalt industry sources told Reuters that VW has asked producers to submit proposals on supplying the material for up to 10 years from 2019.

The Reuters report says VW wants all the cobalt tender proposals submitted by the end of September. "The tender doesn't actually tell you how much cobalt they want. They tell you how many EVs they want to make, you have to work out the cobalt content yourself," one cobalt industry source told Reuters.

The report noted that demand for cobalt is expected to rise rapidly as national markets and the auto industry looks to grow electrification and move away from fossil-fuel burning powertrains.

Battery and auto manufacturers need to sign multi-year deals to secure supplies of raw materials including cobalt and lithium, the report said.

VW said in Frankfurt earlier this month that it plans to spend EUR20bn to roll out 80 new electric cars across its multi-brand group by 2025, up from a previous goal of 30. Moreover, it wants to offer an electric version of each of its 300 group models by 2030.

"The group as a whole will deliver more than 80 new electric models to customers by 2025, including almost 50 true e-vehicles and 30 plug-in hybrids," said VW Group CEO Matthias Müller at the IAA.

The company will provide more than EUR20bn for direct investment in industrialising electromobility by 2030. The money will be spent on vehicles based on two completely newly developed electric platforms, as well as on the plants and workforce qualification. It will also go toward the charging infrastructure, as well as the dealership and sales organisations.

"We also won't let the issue of batteries be taken out of our hands."

Müller also made reference to the importance of key components such as batteries and procurement initiatives taking place. "We also won't let the issue of batteries be taken out of our hands," said Müller. The company will need a battery capacity of more than 150 GWh a year by 2025 solely to fit its own e-fleet with lithium-ion batteries. To cater for that enormous demand, the Volkswagen Group has initiated an invitation to tender for long-term strategic partnerships for China, Europe and the United States. "We're talking here about one of the largest procurement projects in our industry's history, one with a global order volume of more than EUR50bn over its term," said Müller.