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EU Regulatory Authority Approves Establishment of Umicore and PowerCo’s Joint Venture

published: 2023-04-18 9:30

Umicore and PowerCo’s joint venture that was first unveiled in September 2022 has finally received the approval from the EU regulatory authority to begin full-scale operation. Umicore, a material technology and recycling company based in Belgium, announced this news on March 23, 2023. PowerCo is new subsidiary established by the Volkswagen Group for the development and manufacturing of EV power batteries. The total investment in the joint venture has come to around EUR 3 billion.

Source: Umicore

With the greenlight from the regulator, Umicore and PowerCo can immediately develop the large-scale manufacturing of cathode active materials (CAMs) and their precursors (PCAMs). Umicore said that starting from 2025, the joint venture will be supplying the critical upstream materials to PowerCo’s battery manufacturing plants in Europe.

By the end of the decade, the joint venture aims to acquire a production capacity for CAM and PCAM that would be sufficient to meet the demand from 160GWh of cells per year. This amount would also be enough to power around 2.2 million BEVs per year.

Headquartered in Brussels, the joint venture is expected to meet the majority share of PowerCo’s demand within the EU. Through the joint venture, Umicore will secure a stable flow of incoming orders for cathode materials used in EV power batteries. Both parties are currently looking at the potential sites for the joint venture’s manufacturing plant, and the official name for the joint venture has yet to be revealed.

PowerCo is in charge of the Volkswagen Group’s global battery business. Besides manufacturing batteries, PowerCo has been extending its presence across the entire industry chain for Li-ion batteries that power EVs. Furthermore, PowerCo is projected to invest a cumulative total of more than EUR 20 billion with its partners in the field of EV power batteries by 2023. Also, by that same year, PowerCo is projected to reach more than EUR 20 billion in annual sales.

Umicore is also headquartered in Brussels and produces cobalt- and nickel-based CAMs. It is currently listed in the UK stock market. In terms of production capacity, Umicore has eight plants across several Chinese cities including Tianjin, Suzhou, Ganzhou, and Jiangmen.

In addition to CAMs, Umicore has also been long engaging in the R&D of catalysts, other kinds of battery materials, and battery recycling technologies. To secure the supply of raw materials from its upstream, Umicore has signed long-term procurement contracts with Ganfeng Lithium and Vulcan Energy Resources. In its downstream, Umicore has inked agreements with Stellantis and Mercedes-Benz to become their supplier for battery materials. The deals with these carmakers have come to around 13GWh per year. In terms of building up production capacity, Umicore has also entered into cooperation agreements with BASF and Mercedes-Benz.

Umicore’s targets for 2030 are raising its global production capacity above 400GWh per year and form a complete value chain for its battery materials across three continents. To these ends, Umicore will be adding a new plant for CAMs and PCAMs in Canada and expand its existing plants in Asia.

In July 2022, Umicore announced that it will build its first plant in North America for CAMs and PCAMs used in EV power batteries. The location of the plant is in the Canada’s Ontario Province, and the total investment in this project is estimated to reach CAD1.5 billion.

Then, in September 2022, the construction of Umicore’s production base in the Polish city of Nysa was formally completed. With the base in Nysa, Umicore becomes the first supplier for battery materials that has established a complete circular value chain and a sustainable manufacturing process in Europe. From the base, Umicore will be supplying battery materials to carmakers and battery manufacturers based in the region. The production capacity of the base is projected to reach 20GWh per year by the end of 2023 and 40GWh per year by the end of 2024. Its output is also projected to reach above 200GWh per year by the first half of this decade. This amount should be enough to 3 million BEVs per year.

On the technology front, Umicore is seeking to be the leader in the development of high-lithium and high-manganese (HLM) CAMs. The company is currently working on the industrial production process for these products. The hope is that HLM CAMs will be fully commercialized and adopted for EVs by 2026. Umicore is also collaborating with carmakers and battery manufacturers in the development of the related products. Presently, Umicore is manufacturing ternary CAMs in its plants in South Korea and Poland. The new plant that is being set up in Ontario will be used to manufacture HLM CAMs.

This article is a translation of a Chinese article posted by TrendForce. It contains information that is either sourced from other news outlets or accessible in the public domain. Some Chinese names are transcribed into English using Hanyu Pinyin.

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