From left to right: Thomas Schmall, Group Board Member for Technology at Volkswagen AG and Chairman of the Supervisory Board of PowerCo SE, Jörg Teichmann, PowerCo Chief Procurement Officer, Ralph Kiessling, EVP Energy & Surface Technologies at Umicore, Umicore CEO Mathias Miedreich. ©Umicore

Belgian EV Battery materials company Umicore [UMICY] announced on Monday a $2.9 billion (€3billion) Joint Venture with PowerCo, Volkswagen’s [VWAGY]  wholly owned battery subsidiary. Starting in 2025, the joint venture plans to supply PowerCo’s European battery cell factories with cathode active materials and their precursors.

• $2.9 billion – Investment in the JV, split 50-50 between the two companies.
• 160GWh – By the end of the decade the JV hopes to produce cathode materials for 160GWh of cell capacity per year
• 2.2 million vehicles – 160GWh of cell capacity can power ~2.2 million vehicles
• 60GWh – First 60 GWh equivalent of metals refining to be exclusively supplied by Umicore
• 50% – Each party will own exactly 50% of the JV

The JV will initially supply PowerCo’s Salzgitter gigafactory, reaching 40 GWh in 2026. Umicore’s plant in Nysa Poland is a likely production site, though this has yet to be finalized. 

The Nysa plant, which began production in July 2022, is targeting 20GWh of capacity by the end of 2023, 40GWh by 2024 and 200GWh “in the second half of the decade.”

The deal helps Volkswagen secure critical materials as it expects EVs to represent 50% of sales by 2030. Earlier this year Volkswagen established Powerco to house its global battery business, committing to investing €20bn by 2030.

“Cathode material is an indispensable strategic resource for battery production, accounting for roughly fifty percent of overall cell value.” said Thomas Schmall, Group Board Member for Technology at Volkswagen AG and Chairman of the Supervisory Board of PowerCo SE. 

The two companies also stated their intention to work together on battery recycling, an area of particular focus for Umicore, at a later stage. No specifics were announced.

Both companies are highlighting the impact the partnership will have on the development of a European supply chain for EVs. 

“We are setting up a sustainable, transparent supply chain with high environmental and social standards, localizing value creation here in Europe.” said Thomas Schmall of PowerCo.

This is in line with the goals of the EU, which through initiatives such as the European Battery Alliance (2017) and Critical Raw Materials Alliance (2020) has sought to foster a domestic EV battery supply chain.

Umicore CEO Mathias Miedreich also held an analyst and investor conference call and webcast, which can be replayed here.

Link to Webcast

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