Thomas Schmall: “Success Factor Raw Materials”

Lithium, cobalt, and nickel are three substances that make electromobility possible — and that also create dependencies. In an interview with Porsche Consulting Magazine Thomas Schmall, Member of the Board of Management responsible for Technology at Volkswagen Group, provides insights into how Volkswagen is seeking to ensure supply and sustainability in the long term.

According to Thomas Schmall, a stable supply of raw materials has become a major competitive factor not only for Volkswagen but for the entire industry. The shortages have less to do with global deposits than with the available capacities for mining and processing them. In addition, raw material prices have been very volatile in recent years. In order to shield the automotive group from this in the long term, Volkswagen is taking a very strategic approach to raw material procurement.

Volkswagen currently obtains all battery cells from external suppliers, who also procure the raw materials. That will change in 2025 when PowerCo SE, a subsidiary of Volkswagen Group, starts operating its first gigafactory in Salzgitter and powers up its own cell production. Gigafactories in Valencia and in St. Thomas in Canada will follow. PowerCo’s strategy is based on an integrated value chain. That means taking all the relevant areas, from raw material procurement and processing to cell production and recycling, into its own hands.

To prevent possible violations of human rights or environmental standards in the supply chain, Volkswagen already requires its suppliers to commit to high sustainability and safety standards and monitors compliance directly on site, says Thomas Schmall. For four years now, Volkswagen has published a Responsible Raw Materials Report on its own initiative. It covers 18 raw materials the Group has identified as critical to the supply chain, including battery materials such as lithium and cobalt.