Dive Brief:
- General Motors has partnered with Queensland Pacific Metals to secure a greater long-term supply of nickel and cobalt for use in its Ultium battery cells, the company announced last week.
- Per the agreement, the automaker will invest up to $69 million in the Australia-based mineral company for the development of a sustainable, high-purity battery materials refinery as electric vehicle demand grows.
- Construction on the refinery is expected to begin in 2023, and GM said materials sourced from the company will help support EV eligibility for consumer tax credits under new clean energy incentives.
Dive Insight:
The collaboration builds on a spate of sourcing deals GM has signed in recent months that have already secured all raw battery materials needed to meet its production target of 1 million EVs by 2025.
Now, the company has turned its attention to shoring up supply through the end of the decade, Jeff Morrison, GM’s vice president of Global Purchasing and Supply Chain, said in a statement.
Automakers are securing more raw battery materials from Australia, a major producer of lithium, nickel and cobalt. Stellantis and Ford battery supplier SK On also signed agreements for Australian mineral supply last week.
The moves reflect a shift in sourcing tactics for many automakers, which have sought to diversify their supply sources through new joint ventures and materials deals.
In the U.S., the federal government has also encouraged such actions, tying financial incentives for domestic EV production to ceasing the sourcing of critical minerals from China and Russia.
Aside from mining, China currently controls the majority of critical minerals in every step needed to make a lithium ion battery, according to the Benchmark Mineral Intelligence agency.
As a result, direct-sourcing agreements have become critical for EV makers as they ramp up production. Electric vehicles tend to run on lithium batteries that require a mix of graphite, nickel and cobalt among other materials.
“The collaboration with Queensland Pacific Metals will provide GM with a secure, cost-competitive and long-term supply of nickel and cobalt from a free trade agreement partner to help support our fast-growing EV production needs,” Morrison said.
