Vulcan is also to supply CO2-free lithium to Volkswagen

The German-Australian lithium extraction start-up Vulcan Energy has now completed a binding supply agreement with the Volkswagen Group, following agreements with Renault and Stellantis. This means that Wolfsburg will in the future receive CO2-free battery-grade lithium hydroxide from the Upper Rhine Graben, located in southwest Germany and spanning parts of the federal states of Baden-Württemberg, Rhineland-Palatinate, and Hesse. The climate-neutral lithium from the Karlsruhe company is intended to be processed in Volkswagen's cell factories in Europe. The agreement has an initial term of 5 years, with the commencement of commercial delivery scheduled for 2026.

Doubts about the Business Model in the Stock Market

However, the "conditions precedent" of the contract include, according to the company, the successful commencement of commercial operations and full product qualification. Recently, so-called short sellers have cast doubt on the Karlsruhe company's business model at the stock market, accusing them of "empty promises" and exaggerated statements regarding the feasibility, profitability, and environmental impacts of the technology, as reported by Handelsblatt and FAZ. They claim that neither the first drilling has been completed nor approval for the operation obtained. Nevertheless, the prospect of being able to source the critical raw material locally and emission-free is encouraging the cooperation partners.

Climate Neutral Across the Value Chain

The VW Group has set itself the goal of reducing greenhouse gas emissions over the entire life cycle of a vehicle to full climate neutrality. In Europe alone, six gigafactories with a total production capacity of 240 GWh are to be built by the end of the decade. With the sustainably produced raw material from Germany, the VW Group intends to secure the supply for its own future cell production in Europe.

"The Volkswagen unified cell needs to be at the forefront in terms of performance, cost, and sustainability from the start. With our new partners, we are taking another step towards this goal. Together, we will address important parts of the battery value chain and develop pioneering technologies," promised Thomas Schmall, Group Board Member for Technology at Volkswagen AG and CEO of Volkswagen Group Components.

The technology originally developed by Vulcan is said to enable completely CO2-free lithium extraction in the Upper Rhine Graben region. Geothermal extraction would result in no harmful emissions. The method also claims to enable a negative CO2 balance, the provider advertises. Short supply chains due to the geographic location not only strengthen the German economy but also significantly reduce the dependence of the continent on lithium imports, they further outline.

"This agreement makes our Zero Carbon Lithium Project a key factor in Volkswagen's globally leading goal to produce CO2-free electric vehicles, including all raw materials in the battery supply chain," commented Francis Wedin, CEO of Vulcan.

The Wolfsburg-based group has also secured the right of first refusal for investments in additional capacities in Vulcan's Zero Carbon Lithium Project.

Premiere for Domestic Lithium

The Vulcan Group considers itself the first company to bring a Zero Carbon Lithium product from local sources to the market. The company also sees itself as a leader in the production of renewable heat and power to be provided regionally. With LG, Umicore, Renault, Stellantis, and Volkswagen, they have now secured strong partners for the off-take of climate-friendly lithium.