LONDON (Reuters) – Germany’s Volkswagen (VOWG_p.DE) is moving to secure long-term supplies of cobalt, a vital component of rechargeable batteries, as the group accelerates its ambitious shift to electric cars. Cobalt industry sources told Reuters that VW, the world’s largest automaker, has asked producers to submit proposals on supplying the material for up to 10 years from 2019.
Volkswagen, which decided on the strategic shift to electric vehicles (EVs) after it was engulfed in the “dieselgate” scandal, plans to invest more than 20 billion euros ($24 billion) in zero-emission vehicles by 2030 to challenge pioneer Tesla in creating a mass market.
The company, which aims to make up to three million EVs a year by 2025, wants all the cobalt tender proposals submitted by the end of September. “The tender doesn’t actually tell you how much cobalt they want. They tell you how many EVs they want to make, you have to work out the cobalt content yourself,” one cobalt industry source said.
Volkswagen did not respond to Reuters questions on the details of the tender but noted that the group would need more than 150 gigawatt hours of battery capacity annually by 2025 for its electric vehicles.
This would mean major purchases of necessary materials. “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,” it said in a statement. “That will meet the Group’s needs for the first wave of e-mobility.”