Volkswagen Stockpiling Cobalt in its Move Toward Electric Cars

As part of Volkswagen’s ambitious efforts to reorient itself toward vehicle electrification, the brand has started to solicit proposals from cobalt producers for ten year’s worth of supply starting in 2019.

According to cobalt industry sources, Reuters reports the deadline to submit proposals is by the end of September with finalized contracts due by the end of the year. Sources have mentioned ambiguous wording in Volkswagen’s requests for proposals with no mention of the amount of cobalt needed, citing the total number of EVs they expect to make instead. Smaller items of note include a request for an explanation on where each supplier’s cobalt comes from to avoid child labor use practices.

According to Volkswagen in a statement to Reuters, “the procurement project is one of the largest in the history of the automotive industry, with a total order volume of over 50 billion euros. That will meet the Group’s needs for the first wave of e-mobility.”

The overarching goal is to invest $24 billion in electric cars by 2030 to better compete with the likes of Tesla, GM, and Ford in its quest for market and material share. According to Reuters, the company plans to produce up to three million EVs a year within eight years. Early on, Volkswagen has gained significant traction, with encouraging figures such as its European plug-in market share of 11 percent compared to Tesla’s 9 percent, according to Seeking Alpha.

Cobalt is a vital component of rechargeable batteries and a known extender of battery life, allowing automakers to guarantee eight to 10 years of power. Demand is expected to increase exponentially over the next decade as adoption for electric cars rises. Volkswagen has also announced its plans to produce 80 new electric car models by 2025 across its portfolio of brands, according to VW Group CEO Matthias Mueller.

Reuters


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