Volkswagen is planning to invest in mining projects as part of a wider effort to reduce the cost of battery cells, meet 50% of its own demand, and sell to third-party customers.
Thomas Schmall, the board member in charge of technology at Volkswagen, explained that the company’s ambition is to make its battery unit, PowerCo, a global battery supplier, and to meet half its own demand with plants mostly located in Europe and North America.
Volkswagen has partnered with mining companies in Canada, where it plans to build its first North American battery plant in St. Thomas, Ontario. Schmall stated that such partnerships guaranteeing finance can cut years off mine development times for junior miners.
Volkswagen has allocated up to €15bn in its €180bn five-year spending plan for its three announced battery plants and some raw material sourcing. The carmaker has secured its raw material supply until 2026 and will decide in the next few months how to meet its demand from then on. Schmall acknowledged that reducing battery costs further remains a challenge and that Volkswagen is using all the instruments at its disposal with PowerCo.