Volkswagen Secures Long-Term Lithium Supply with Patriot Battery Metals

Patriot Battery Metals

Volkswagen, through its battery subsidiary PowerCo, has sealed a decade-long offtake agreement with Patriot Battery Metals, a Canadian lithium explorer, to source 100,000 metric tonnes per year (t/yr) of spodumene concentrate (SC). This deal is a strategic move to secure critical lithium resources as Volkswagen continues to expand its electric vehicle (EV) and battery production globally.

Patriot’s Shaakichiuwaanaan Asset Powers the Deal

The spodumene concentrate will be supplied from Patriot's Shaakichiuwaanaan Mineral Resources in Quebec, Canada. Notably, this resource is the largest lithium pegmatite deposit in the Americas and the eighth-largest globally, making it a vital supply chain asset for lithium-ion battery production. The concentrate will have a target grade of 5.5% lithium oxide, ideal for battery applications.

PowerCo plans to use the raw materials to fuel its gigafactories in Europe and North America, including its St. Thomas, Canada facility, which is set to be its largest cell factory, boasting a production capacity of up to 90 GWh per year.

Volkswagen Invests in Patriot and Future Lithium Conversion

As part of the partnership, Volkswagen has invested $48 million for a 9.9% stake in Patriot Battery Metals, signaling its commitment to long-term lithium sourcing. The deal also hints at future collaborations, including the potential development of a lithium conversion facility to ensure supply chain resilience and further vertical integration.

Volkswagen’s EV Push Faces Challenges

Volkswagen has delivered 506,500 battery electric vehicles (BEVs) globally from January to September 2024, a 4.7% decline year on year. Despite overall growth in North America, BEV deliveries in the US fell by 26%, reflecting competitive challenges in the region.

In Europe, Volkswagen remains dominant with a 19% market share in the BEV segment, reaffirming its stronghold. To bolster its EV ecosystem, the German automaker also formed a $5.8 billion joint venture with Rivian in November 2024 to advance software and electronics architectures for scalable EV platforms.

Strategic Significance

This agreement underscores the importance of securing stable, long-term access to critical minerals like lithium as automakers ramp up EV production. It also highlights Canada’s growing role as a key player in the global battery supply chain, thanks to its abundant natural resources and strategic partnerships with major manufacturers like Volkswagen.