In its latest bold move to lock up raw materials for electric vehicles, Mercedes-Benz is announcing a new deal with Rock Tech Lithium for 10,000 tons of battery-grade lithium annually.
Best known for its luxurious German vehicles, Mercedes is great at raising the bar for what an automobile can do. Now, the automaker is moving quickly to secure its future position in the auto market.
As demand for EVs continues rising at record levels, automakers from all corners of the globe are pouring billions to catch first mover Tesla. Tesla still controls 68% of the EV market, but its lead is slipping as automakers set their sights on an electric-only future.
Since President Biden signed the Inflation Reduction Act (IRA) into law last week, North America is becoming a hot spot for EV production.
A big part of the bill includes tax credits for electric vehicles. However, for automakers’ EVs to be eligible, the IRA outlines specific conditions that must be met. For one, the materials must be sourced, and the vehicle needs to go through final assembly in the United States or its fair-trade partners.
Several foreign automakers that are left out of the deal are looking to make sure their EVs qualify. For example, Hyundai is reportedly speeding up the timeline to make its IONIQ EV series on US soil.
And Tuesday, we are hearing more big news from across the pond. According to Automotive News Europe, two German auto manufacturers are moving quickly, signing deals for raw materials to be sourced in Canada.
Volkswagen is working to simplify its supply chain to ramp battery production and avoid US tariffs and regulations. Meanwhile, Mercedes is working with fellow European automaker Stellantis to build a total of eight battery plants.
With its new lithium agreement, Mercedes gets one step closer to its goal of an all-electric lineup by 2030.
Mercedes secures 10,000 tons of lithium annually, starting in 2026
Mercedes signed a binding agreement with Rock Tech to provide battery-grade lithium for its EV models. As part of the deal, Rock Tech will deliver 10,000 tons of lithium hydroxide a year, starting in 2026.
The partners released the news Tuesday as German Chancellor Olaf Scholz visited Canada. Rock Tech is a Canadian mining company focusing on extracting lithium to fill the supply gap. The lithium miner plans to operate a mine in Georgia Lake, Canada, and is also developing its first lithium hydroxide converter in Germany.
With Mercedes planning to only launch EVs after 2025, the new deal will be critical for battery minerals as the german automaker ramps production.
Perhaps, more importantly, it may help US buyers looking to buy a Mercedes and still get the tax credit. For example, Mercedes is launching the EQB, a small electric SUV, starting at $55,000.
The new lithium deal shows Mercedes is willing to do what it takes to gain market share in the fast-growing EV market.
Not only is this great news for Mercedes, but it’s also good news for Mercedes fans in the United States. With EV options under the current tax credit threshold (like the EQB), Mercedes is likely targeting US buyers looking to get the credit.
The german automaker’s agreement with Rock Tech is the latest news of foreign automakers moving to secure materials and build EVs in North America.
Hyundai, Volkswagen, and Mercedes are rapidly making deals to secure their EV market share in the United States and globally. It’s exciting to watch auto manufacturing make its way back to the United States in what looks to be the new trend.
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