Automotive OEM Mercedes-Benz has taken a further step toward its transition to electrification with a new partnership with Rock Tech Lithium, a German-Canadian raw materials startup.
This is the second automotive OEM to invest in a raw materials startup this year after General Motors took a $650 million equity investment in Canada’s Lithium Americas Corp.
The partnership will allow Mercedes-Benz to receive a supply of high-grade lithium hydroxide to supply its battery partners for fully electric vehicles (EVs).
The partnership includes a new lithium converter plant in Brandenburg, Germany, and is the next step toward localization of raw materials and batteries for the Stuttgart-based automotive OEM.
Under the agreement:
- The procurement of raw materials to deepen its vertical integration of drive technologies locally in Germany and Europe.
- A deeper cooperation across all stages of the automotive value chain.
- A roadmap for achieving net carbon-neutral production of lithium hydroxide by the end of 2030.
Why it matters
Lithium is a key material in lithium-ion batteries that allows the repeated charging and discharging of high energy density for use in EVs.
As more EVs are developed, a strain on battery raw materials occurs. In the short term, raw materials such as lithium, cobalt and nickel will likely increase in price, thereby driving overall pricing of EVs. As a side effect of the rapid increase in raw material pricing, battery manufacturers and even some EV companies are investing in mineral resources to accelerate the supply of materials, according to market research firm TrendForce.
As automotive OEMs get closer to reaching their EV targets by 2040, the strain on batteries and raw materials could even further increase. To prevent this from happening, automotive OEMs are looking to secure supplies in case of potential shortages in EV batteries and raw materials as well as price hikes for both batteries and raw materials.
