Mercedes, VW Turn to Canada for BEV Battery Materials

With the scramble for sources of the key materials used in electric-vehicle batteries intensifying, Mercedes-Benz and Volkswagen look to Canada to help bolster their access and supplies of the critical minerals.

The Canadian government plans to strengthen its cooperation across the battery-electric-vehicle value chain under a memorandum of understanding (MOU) signed in Toronto in the presence of German Chancellor Olaf Scholz and Canadian Prime Minister Justin Trudeau.

“Mercedes-Benz is looking to open new ways to responsibly acquire raw materials to rapidly scale up electric-vehicle production. Securing direct access to new primary and sustainable sources of raw materials is a vital step down this road,” notes Markus Schaefer, member of the Board of Management of Mercedes-Benz Group and chief technology officer responsible for R&D and procurement.

“With Canada, Mercedes-Benz has a strong and capable partner to break new ground for a new era of sustainable transformation in the automotive industry,” Schaefer says.

One of the Canadian ventures Mercedes-Benz is exploring involves a strategic partnership with Rock Tech Lithium, which could allow the German maker of luxury cars to supply its vendors with lithium hydroxide to meet global demand for BEVs. Starting in 2026, Rock Tech intends to supply Mercedes-Benz and its battery partners with up to 10,000 tons of lithium hydroxide annually.

Mercedes EQS SUV front 1.4_0

The intended agreement with Mercedes marks a decisive step for the supply of high-quality lithium to be processed in Germany. Under the strategic partnership with Rock Tech, Mercedes-Benz is expected to advance localized production in Europe of  of state-of-the art battery cells. This significant amount of lithium sourced directly from Rock Tech could – together with additional partnerships in the future – help the Stuttgart-based automaker achieve its ambitious electrification goals, according to Mercedes-Benz.

“To scale up mass production of electric vehicles we need access to raw materials. With the intended Rock Tech partnership, we are diversifying the sourcing of our raw materials as part of a direct sourcing approach to secure the lithium supply for Mercedes-Benz battery production in Europe,” says Gunnar Guethenke, vice president-procurement and supplier quality at Mercedes-Benz.

“As sustainability is a central pillar of our Mercedes-Benz purchasing strategy, we appreciate that Rock Tech plans to supply Mercedes-Benz with lithium from mining sites audited to the standard of IRMA (Initiative for Responsible Mining Assurance) and processed with renewable energy sources,” he says.

Volkswagen executives note the MOU will create opportunities for Canada to contribute to the automaker’s global and regional battery supply chains.

VW says PowerCo, the Group’s newly founded battery company, will have a central role in the initiatives in Canada that will promote the planned cooperation in the fields of battery value creation, raw-materials supply chains and cathode material production in North America .

PowerCo is responsible for all global Group activities along the battery value chain, securing battery cell supplies for Volkswagen's e-mobility push.

ID.Buzz front 1.4 (2)_0

The rapidly growing battery cell business is a key pillar of Volkswagen’s “New Auto” strategy, which aims to make the automaker the leading provider of more sustainable and software-driven mobility. The plan is to quickly build up highly standardized cell production capacities totaling 240 GWh per year in Europe alone. In addition, there are plans to establish a dedicated Gigafactory in North America and production sites are currently being examined, VW says in statement after the MOU signing.

Thomas Schmall, Volkswagen Group Board of Management member for technology, says: “As an automaker, we see compliance with stringent sustainability criteria as a top priority. For us, the availability of power from renewable sources and a raw-materials sector with mines supplying materials conforming to the globally recognized environmental and social standards are crucially important. That is why Canada is an ideal partner for our e-mobility and battery strategy.”

As BEV sales accelerate, access to critical minerals has become a major issue for automakers since some of the key sources of the materials include Russia, which is subject to tough sanctions due to the conflict in Ukraine, and parts of Africa rife with human-rights abuses and child labor.