US media reported that China has taken a step closer to become the world's leading battery maker. One of Chinese leading lithium battery manufacturer plans to sign a long-term supply agreement with Germany’s Volkswagen.
Bloomberg reported on April 6, the media services department of Volkswagen said on April 5th that it has signed a 10-year memorandum understanding with Ganfeng Lithium,which is expected to reach an agreement within the next few months. Following deals with Tesla,BMW,and battery maker LG,it will strengthen the position of Ganfeng Lithium as the leading supplier of electric vehicles.
According to the report, electric car makers are struggling to secure supplies of key battery materials such as lithium and cobalt,while investors and mining companies are trying to assess the potential growth in the sector. Volkswagen said global demand for lithium is expected to more than double by the year of 2023, it's underlining the importance of sourcing supplies. The world's largest carmaker has the most ambitious plans for electric vehicles in the traditional car industry,with the target of a quarter of total sales by 2025.
The report says Volkswagen did not disclose the terms of the proposed deal,but it's likely to be one of the longest and that could boost the size of the lithium hydroxide market. According to the announcement,Volkswagen plans to launch more than 70 new types of pure electric vehicles into the market in the next 6 years. By 2025,about a quarter of Volkswagen vehicles will be pure electric vehicles, and the demand for battery materials will be increased rapidly in the future. The establishment of long-term strategic cooperative relationship between Ganfeng Lithium and Volkswagen not only satisfies Volkswagen‘s demand for the battery key raw materials, but also helps to improve its sustainable profitability,which will have a positive impact on the business performance of Ganfeng Lithium in the next 10 years.