High Voltage: Volkswagen now wants to build its own battery megafactory, needs much more lithium
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Each week our High Voltage column wraps all the news driving ASX battery metals stocks with exposure to lithium, cobalt, graphite, manganese and vanadium.
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Following in Tesla’s footsteps, German car giant Volkswagen has said it now wants to build a lithium-ion battery megafactory.
Volkswagen is now “publicly warming to the idea of their own captive lithium ion battery supply”, battery metal price analyst Benchmark Mineral Intelligence said.
“The sheer scale and speed of its pure EV plans – vehicles that are 100 per cent battery powered – means it is likely battery producers will not be able to keep pace with the world’s leading auto producer.
“Another critical point is that VW will need tier one lithium ion battery suppliers. The auto industry has struggled to secure the necessary volumes of tier one cells from the highest quality production needed for the unforgiving demands of an electric vehicle.”
VW announced last week it had inked an MoU to secure long-term lithium supplies from China’s Ganfeng.
The carmaker plans to launch more than 70 new EV models in the next 10 years, which equates to about a quarter of the vehicles VW will make and deliver by 2025.
Dr Stefan Sommer, group board member for components and procurement at VW, said this means there will be a “rapid increase” in the company’s raw material demand for cell production in the coming years.
“We must make sure we cover this demand at an early stage. Long-term agreements like the one for lithium, a key raw material, that we have just concluded with Ganfeng are therefore of crucial strategic significance for implementing our electric offensive.”
VW has upped its target from 15 million EVs to more than 22 million EVs in the next decade.
Benchmark says that to meet its new target VW will require significant battery cell production – about 1,500 gigawatt hours of battery cells.
Meanwhile, American car giant Tesla is speeding up works at its gigafactory in China, which is expected to be operational by the end of this year.
But Benchmark isn’t expecting lithium-ion battery production to start for at least another 18 months to two years and Tesla is still seeking a battery partner for the facility.
Tesla’s new Model Y EV will be built in the factory in Shanghai.
Of the battery metals players on our list, 83 advanced this week, 49 remained steady, 61 lost ground and one remained suspended.
Cougar Metals (ASX:CGM) is the top mover for the week with a doubling of its share price to 0.1c, but on no news.
The company has a lithium project in Brazil and nickel and cobalt project in Western Australia.
In late March, Cougar Metals decided not to go ahead with a deal to earn an interest in a cobalt project in Chile because of the recent decline in the cobalt price.
Canada’s First Cobalt (ASX:FCC) raised $1.6m last week to fund work on its cobalt refinery in Ontario.
The company is investigating a potential restart of the 2,000-tonne-per-annum refinery.
Its share price rose 25 per cent over the course of the week to 20c on Monday.
At the other end of the scale, Metals Australia (ASX:MLS) lost the most ground with an over 33 per cent slide to 0.2c.
Last week the company started its first diamond drilling program at the Lac Rainy graphite site in Canada.
Taruga Minerals (ASX:TAR) dipped nearly 30 per cent to 5c over the past week.
The cobalt explorer is facing delays in securing a new licence for its projects in the Democratic Republic of the Congo (DRC) due to the recent election.
Taruga said there had been no recent high-level government appointments… besides that of the President in the December election.
Here’s a table of ASX battery metal stocks with exposure to lithium, cobalt, graphite, manganese and vanadium:
Scroll or swipe to reveal table. Click headings to sort.