Volkswagen Unveils Asian Ventures to Secure Nickel and Cobalt Supply

Volkswagen will establish a joint venture with Huayou Cobalt and Tsingshan Group to secure the supply of nickel and cobalt for electric vehicles in China, one of the world's leading automotive markets, and to reduce the cost of rising commodity prices.

The company has taken this step as a part of a 30 billion euro push by the second-largest carmaker in the world in order to build a network of battery cell factories and secure more direct access to vital raw materials that are needed to supply them.

The venture will be able to supply raw materials for 160-gigawatt hours worth of electric vehicle batteries at the final expansion stage of the venture.

Volkswagen, Huayou Cobalt and Tsingshan have signed a memorandum of understanding for a joint venture in Indonesia, which holds more than 10% of the world's laterite nickel ore reserves, to focus on the production of nickel and cobalt raw materials.

Russia is a major supplier, and global nickel prices have risen nearly 400% this year during the Ukraine crisis, as the invasion of Ukraine and subsequent sanctions on Moscow have already ignited hot markets.

Volkswagen's move comes as rivals, from Tesla to BYD are raising the price of electric vehicles due to rising raw material costs following Ford's announcement last week, in which it spelled out plans for a nickel cell joint venture in Turkey.