NEWS

Beijing, March 21st, 2022. Volkswagen Group China has signed two memorandums of understanding (MOU) for strategic partnerships with Huayou Cobalt and Tsingshan Group, intending to further strengthen its position in the Chinese battery value chain and the group's competitiveness in the fast-growing e-mobility industry in China. The cooperation aims to achieve significant cost advantages, secure the raw material supply and achieve a transparent and sustainable supply chain. Cathode materials are the main component of Li-ion batteries. They determine the energy density of a cell. The cathode material accounts for a large share of the battery cell costs. The two partnerships target to contribute to the Group's long term target of a 30-50% cost reduction on each battery. Volkswagen Group China, together with Huayou and Tsingshan Group intend to form an upstream Joint Venture (JV) focusing on nickel and cobalt raw material production. In parallel, Volkswagen Group China and Huayou plan to establish a downstream JV specialized in refining nickel and cobalt sulfates, as well as precursor processing and the production of cathode materials to support VWs ambitious EV growth strategy in the Chinese market. 

Upstream Joint Venture with Huayou and Tsingshan in Indonesia

Volkswagen, together with Huayou and Tsingshan, intends to form a JV in Indonesia, where more than 10% of the world's laterite nickel ore reserves are located. The partners agreed to jointly invest their respective advantages and resources for battery raw materials production. At the final expansion stage, the total production capacity of raw materials is equal to the supply of 160 GWh battery's demand for nickel and cobalt raw materials. 

Downstream Joint Venture with Huayou in Guangxi, China

Volkswagen also plans to establish a JV with Huayou for the refining of nickel and cobalt sulfates, precursor and cathode material production. Huayou will utilize its integrated production process to support Volkswagen to further optimize the battery cost and to further reduce CO2 emissions in the company's Chinese supply chain of new energy vehicles (NEVs). 

About the Partners

Huayou is a new high-tech enterprise founded in 2002 and based in Tongxiang, China. The company is specialized in new energy Li-ion battery materials and new cobalt materials. 

Tsingshan was founded in 1992 and specializes in stainless steel and primary nickel. With the added advantage of owning its own rich nickel ore resources, Tsingshan began to enter the new energy industry in 2017.

Photo of Signing Ceremony