Stellantis announced plans in spring for a pair of North American battery cell plants, one in Windsor, Ont., the other in Kokomo, Ind. In June, it turned its attention to securing material supply, saying it would spend 50 million euros to become the second-largest shareholder in Australia-based mining company Vulcan Energy Resources Ltd., which is developing a lithium project in Germany. The venture builds on a previous supply deal with Vulcan and will secure Stellantis a stream of lithium hydroxide into the mid 2030s.
The “highly strategic” deal will help Stellantis create a “resilient and sustainable value chain” for battery production in Europe, company CEO Carlos Tavares said at the time.
When asked in late July, Stellantis declined to comment further on its EV supply chain strategy.
Seeing automakers step directly into the resource sector is a “real turning point,” said Martin Turenne, CEO of Vancouver-based FPX Nickel Corp., which is developing a nickel deposit in British Columbia.
“It’s a bit of a gamechanger and a paradigm shift for how these companies are all going to have to collaborate across the supply chain.”
While many new battery plants and assembly-line retrofits have already been announced, Turenne said mining companies are still struggling to secure capital to get projects off the ground. He sees the Stellantis investment in Vulcan as the beginnings of a fresh wave of spending that will extend to the resource realm. Upstream investments from battery makers, chemical companies and automakers will help fill the “capital gap” mining companies are facing, he said.
Other automakers are already inching into the market.
Mercedes-Benz Group and Volkswagen Group each signed deals with the Canadian government in August to secure access to battery materials. The agreements included no firm commitments, but François-Philippe Champagne, federal minister of innovation, science and industry, said the deals “cement” the interest of the Germany-based automakers in Canada and set the country up for future investments.
Separate from the accord with Ottawa, Mercedes-Benz and Rock Tech Lithium announced a supply agreement Aug. 23 that would see the Vancouver-based mining company supply Mercedes-Benz with 10,000 tonnes of lithium hydroxide a year, beginning in 2026. Rock Tech is developing a lithium project in Ontario, as well as a processing plant in Germany.
The budding partnerships between automakers and the resource sector are partly about the reliability of supply given recent geopolitical risks, said Photinie Koutsavlis, vice-president of economic affairs and climate change at the Mining Association of Canada. But corporate environmental, social and governance (ESG) goals also play a role.
“We’re starting to see where the end of the value chain is partnering with the upstream … to ensure there is that reliable source of supply from a country that can stand behind ESG credentials.”
As the North American EV supply chain is built out, Koutsavlis expects to see more companies prioritize responsibly sourced minerals. This will give countries such as Canada with its clean-energy grid and reliable environmental-assessment process a leg up, she added.
Phil Gross, CEO of Snow Lake Lithium, also expects Canada’s environmental track record to help the country’s battery mineral companies over the long-term.
Snow Lake, which is developing a carbon-neutral mine in Manitoba, is in ongoing partnership talks with automakers and battery companies, Gross said. In the near term, he expects the carbon impact of the components in a vehicle will be yet another metric automakers compete on.
Securing sustainably sourced battery minerals will require greater automaker involvement at all levels of the supply chain, he said, despite vertical integration being novel to most in the auto sector.
“It’s literally counter to everything they’ve been taught and conditioned to believe. It has always been outsourcing, just-in-time inventory — windshield wipers here, cigarette lighters there. They just want to put together the final piece at the last minute and sell the car.”