Belgian materials specialist Umicore and PowerCo, the battery company of German automotive giant Volkswagen, are to expand their partnership in battery materials. To this end, they are exploring a long-term strategic agreement to supply PowerCo’s future giant electric vehicle plant in North America. Umicore reports this in a press release.

Umicore and PowerCo have also already established a joint venture for the European production of battery materials for electric cars.

550 000 EVs per year

The proposed non-exclusive agreement would make PowerCo a key customer for the battery materials plant Umicore plans to build in Ontario, Canada. Construction of that plant would begin in 2023, and production would start in late 2025.

The planned facility would be the first of its kind in North America, combining cathode and precursor materials manufacturing at a large industrial scale. With the construction of the plant comes an investment of 1,2 billion dollars.

The prospect is to reach an annual production capacity capable of powering about one million electric vehicles by the decade’s end. The plant could supply PowerCo from 2027, increasing to as much as 40 gigawatt hours (GWh) per year in 2030, comparable to about 550 000 electric cars.

Aiming for growing US market

Umicore’s specialty is to supply a mixture of lithium, nickel, cobalt, and manganese for battery cells. Active cathode materials would represent about 50% of the total cell value of an electric car battery.

A long-term supply of Umicore’s new generation of battery materials would fit into both companies’ strategies to develop a regional and fully integrated battery supply chain for North America.

Volkswagen currently has a plant in Chattanooga in Tennessee, where it now produces the Passat and the Atlas SUV. PowerCo’s batteries are initially destined for that plant. By 2030, Volkswagen Group companies aim to offer more than 25 EV models to American consumers.

Other deals in the pipeline?

In Europe, Umicore and PowerCo agreed in September to set up a joint venture to produce battery materials for about 2,2 million electric vehicles a year by the end of the decade.

In April, Umicore also set up an agreement in Europe with ACC, the battery consortium in which Mercedes-Benz, Stellantis, and TotalEnergies are participating.

According to the newspaper De Tijd, this deal with ACC may also be replicated in North America. Indeed, Mercedes has a large SUV production plant in Tuscaloosa in the state of Alabama, and Stellantis has a Chrysler plant in Ontario and builds Jeeps in Detroit, just across the US border.

The US lags significantly behind Europe and China in terms of vehicle fleet electrification, but US sales of battery-powered cars jumped 70% in the first nine months of the year. The Biden administration aims to break China’s dominance in the battery supply chain.