Lithium: The Irreplaceable Element of the Electric Era

“Long-term agreements such as the one we have now made with Ganfeng for the most important raw material, lithium, have decisive strategic importance for the implementation of our ‘E-Offensive’,” says Dr. Stefan Sommer, Group Board of Management member for Components and Procurement at Volkswagen AG, thus formulating the extreme importance of the long-term lithium supply for the Volkswagen Group at the start of the electric era. The joint Memorandum of Understanding (MoU) with the Chinese lithium producer ensures security of supply in the key technology of the future - and makes a decisive contribution to implementing Volkswagen's ambitious Group goal of launching the largest E offensive in the automotive industry and has projected 22 million E 

Michael Bäcker, Head of Procurement for Electric Mobility at Volkswagen AG, explains: “The strategic cooperation with Ganfeng is the result of an intensive analysis of the markets by the Volkswagen Group’s electric raw materials team. This specialized team focuses on targeted relationship building with companies in the raw materials industry. Together with specially selected strategic partners, Volkswagen is working on synergies along the value creation chain for HV batteries. As well as securing capacities at competitive prices, the Group’s particular focus is on sustainability.” But why is lithium so important for the production of electric car batteries? And how will Volkswagen secure a sustainable supply chain?

Lithium will in the near future be one of the most sought-after raw materials on earth. According to forecasts, the worldwide demand for lithium will more than double by 2023 – largely owing to processing in car batteries.

Basically, five main raw materials are required for the production of lithium-ion battery cells for electric cars. On the cathode side, a compound of the elements cobalt, nickel and manganese functions through its structure as a storage location for the charge carrier lithium, on the anode side this is graphite. Lithium is also contained in the electrolyte. Lithium is currently regarded as an unrivalled charge carrier that will be irreplaceable for the foreseeable future, as no other element offers comparable properties for automotive battery applications. Accordingly, securing access to raw materials and the market is essential.

It is a different matter, for example, for cobalt: the percentage of this raw material is to be reduced from its present 12 to 14 percent (weight proportion in the cathode) to five percent within the next three to five years. Volkswagen is working on further development of cobalt-free batteries.

Lithium will in the near future be one of the most sought-after raw materials on earth. According to forecasts, the worldwide demand for lithium will more than double by 2023 – largely owing to processing in car batteries.

Basically, five main raw materials are required for the production of lithium-ion battery cells for electric cars. On the cathode side, a compound of the elements cobalt, nickel and manganese functions through its structure as a storage location for the charge carrier lithium, on the anode side this is graphite. Lithium is also contained in the electrolyte. Lithium is currently regarded as an unrivalled charge carrier that will be irreplaceable for the foreseeable future, as no other element offers comparable properties for automotive battery applications. Accordingly, securing access to raw materials and the market is essential.

It is a different matter, for example, for cobalt: the percentage of this raw material is to be reduced from its present 12 to 14 percent (weight proportion in the cathode) to five percent within the next three to five years. Volkswagen is working on further development of cobalt-free batteries.

Recycling also plays an important role in the Volkswagen Group’s lithium strategy. Today, it is still difficult to recuperate “technical lithium” using the current battery recycling processes. That’s why the Volkswagen Group is working on its own process to recycle lithium in a cost-effective way. In addition, Volkswagen has been conducting research since back for a long time on how more and more materials can be repurposed by means of battery recycling – for example, by “2nd life” applications in stationary storage devices, re-manufacturing, or “closed loop” concepts. By the end of 2019, the Group plans to set up a recycling facility in Salzgitter in which innovative recycling processes will be developed. However, it is expected that batteries will not be returned for recycling in significant numbers until 2030.

Along the entire value creation chain, Volkswagen is committed to sustainability initiatives such as the Responsible Minerals Initiative and the World Economic Forum’s Global Battery Alliance. The aim is to develop common standards and tools to minimize ecological impact and contribute to a positive social development, and to establish them worldwide. The measures in the initiatives are supported by the company's own specifications and checks along the supply chain, which are facilitated by the increased transparency through the direct procurement of materials.

Last but not least, Volkswagen has set itself the goal of promoting lithium production in Europe in the medium term - there are relevant deposits in Central and Southern Europe, for example. Several production steps are required before the lithium enters the cell: First, the raw material is extracted from the rock, then processed in chemical processes to produce concentrate and hydroxide, then processed with cobalt, manganese and nickel to form a mixed oxide, applied to an aluminium foil, inserted as a wound foil into the cell housing and mixed with electrolytes. As many of these steps as possible are to be implemented in Europe in the future.