Volkswagen Group is investing C$69 million ($48.1 million) to acquire a 9.9% stake in Patriot Battery Metals Inc., marking its first venture into the mining industry.
This investment ensures a supply of 100,000 metric tons of lithium over 10 years, which constitutes a quarter of the initial phase of Patriot’s Canadian lithium project, crucial for Volkswagen’s electric vehicle production.
The lithium material will be used to supply Volkswagen’s battery plants in North America and Europe.
This investment highlights Volkswagen’s commitment to electric vehicles, despite challenges such as sluggish EV sales in Europe and reduced government incentives.
While EV sales increased by 6.9% in Europe in October, they are still down for the year, and Volkswagen has implemented cost-saving measures, including major plant closures in Germany, amid ongoing growth difficulties.
Lithium producers are facing challenges due to the slowing EV market, leading to increased inventories and delayed expansion plans amid weaker prices.
Despite this, Volkswagen’s investment in Patriot Battery Metals is part of a broader trend of lithium deals, including Rio Tinto Group’s $6.7 billion bid for Arcadium Lithium Plc in October, signaling continued interest in securing raw materials for electric vehicles.
