This is in line with the company’s strategy to move forward with the electrification of its fleet.

Besides gaining security of supply, the company spokesperson confirmed to Fastmarkets that Volkswagen aims to secure direct access to battery raw materials, such as lithium and cobalt, to better control the cost of battery cell production.

The automaker on June 9 said it was investing an additional $620 million into Swedish battery producer Northvolt in a bid to secure battery cells for its electric vehicle (EV) push.

This follows an initial investment of more than $1 billion by Volkswagen in 2019 into the battery startup.

Volkswagen said in March that it was working on the development of six battery-manufacturing sites in Europe to guarantee security of supply for its EV fleet. A company spokesperson confirmed to Fastmarkets in June that the automaker was considering launching an initial public offering for its new battery division.

Lithium is a key component used in the manufacture of EV batteries and for energy storage systems, and market sources expect demand for lithium in both uses to soar in the coming years.

Fastmarkets’ latest assessment of the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price, cif China, Japan & Korea was at $14-16 per kg on June 17, up by 66.67% from $8.50-9.50 per kg on December 31, 2020.

Higher prices have been heard in the Asian spot market for battery-grade lithium hydroxide, with China’s domestic price rising progressively since the end of 2020 due to a recovery in demand amid tight supply, sources said.