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VW, Mercedes-Benz Look To Source Battery Materials

CANADA
  • Volkswagen and Mercedes-Benz have signed joints memorandums of understanding with the Canadian government to secure raw materials for their battery-supply chains as they ramp up production of electric vehicles.
  • It includes lithium, nickel and cobalt, with VW reviewing potential sits for a planned large-scale battery factory in North America and Mercedes planning to enter an agreement with Rock Tech Lithium for supply of lithium hydroxide.
  • In the case of lithium, it has played little impact from a macro perspective for Canada, with exports of lithium carbonates almost halting in 2020 and lithium oxide/hydroxide exports also low as global prices fell, but an almost 7-fold increase in lithium prices since prior to the pandemic could have a larger impact this time around.
  • Gains are however likely limited by known Canadian reserves of 0.53mln tonnes compared to 4.7mt in Australia or 9.2mt in Chile of the other major producers.

Lithium carbonate price ($/kg)Source: Bloomberg

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