Swiss automaker Volvo is in advanced talks on securing a lithium supply, a vital component in electric-vehicle (EV) battery manufacturing.
- Volvo’s discussions with lithium suppliers aren’t just centered around securing a supply but potentially owning a stake in the mining or processing operations.
- Big automakers are scrambling to secure access to lithium that will power their new EVs.
- Other car manufacturers have considered directly holding a stake in a lithium supplier as lithium prices are expected to rise due to increased demand.
- General Motors is considering a stake in a Brazilian mine that processes metals needed for EVs. It has also announced investments into the developing lithium mine in Nevada.
Why it’s news
After supply-chain backups disrupted the auto industry last year, manufacturers are eager to ensure they have uninterrupted access to needed supplies. Manufacturers aim to avoid repeating the troubles of last year when the semiconductor chip shortages cut into production.
Some of the interest in securing access to EV battery components is motivated by government incentives. Several recent pieces of legislation, like the Inflation Reduction Act, incentivize manufacturing in the U.S. and Canada.
GM and South Korean manufacturer POSCO recently invested in a Canadian EV-battery material factory. Stellantis and LG Energy Solution have also invested in a battery manufacturing plant in Ontario.
One of the largest automakers, Volkswagen, hasn’t committed to investing in a lithium mine. Though when it began EV manufacturing, the German manufacturer began producing its own components in-house. Already the company has multiple batter plants established in Europe and is planning another in North America, The Wall Street Journal reports.