Dutch carmaker Stellantis has entered into a long-term binding agreement to procure lithium hydroxide from Australia-listed lithium supplier Vulcan Energy Resources. The contract involves a minimum quantity of 81,000-99,000MT of lithium hydroxide to be procured over a five-year period starting from 2026. The deal was announced by both companies on November 29 and has been reported by various news agencies including Reuters.
Vulcan is expected to supply lithium hydroxide to Stellantis from its lithium brine mine in the Upper Rhine Valley of Germany. According to Vulcan, this lithium brine mine emits no CO2 emissions and produces very little environment impact because its mining process is powered by geothermal energy. Once delivered, the lithium hydroxide will be used by Stellantis to manufacture powertrain batteries at its three plants respectively located in Termoli (Italy), Kaiserlautern (Germany), and Douvrin (France).
Dr. Francis Wedin, managing director of Vulcan, said that the contract fits into the mission of his company to decarbonize the supply chains for lithium-ion batteries and electric vehicles. He pointed out that the lithium brine mine in Germany has the advantages of creating no CO2 emissions and being proximally close to the battery manufacturing plants of Stellantis. Hence, the deal wholly aligns with Vulcan’s overall strategy.
Michelle Wen, chief purchasing and supply chain officer of Stellantis, said that her company is accelerating efforts in the electrification of vehicle offerings, and the deal reflects the competitive drive to live up to this commitment. Wen added that Stellantis is fully devoted to achieving “safe, clean, and affordable freedom of mobility” that is demanded by the wider society. In its press release announcing the deal, Stellantis also stated that it aims to have low-emission vehicles account for more than 70% of its vehicle sales in Europe and more than 40% of its vehicle sales in the US by 2030. Furthermore, each of Stellantis’s vehicles brands that include Chrysler, Fiat, Jeep, and Maserati will be offering “best-in-class fully electrified solutions”. To reach these targets, Stellantis plans to invest more than EUR 30 billion into fleet electrification through to 2025. The carmaker will also be building two battery manufacturing plants in North America in addition to the three in Europe. These two new plants are joint ventures with Samsung SDI and LG Energy Solution respectively.
As for Vulcan, its lithium brine mine in Germany is also supplying lithium hydroxide to French carmaker Renault. Vulcan sealed a second long-term contract with Renault just a week before entering into this latest deal with Stellantis.