The world's fifth-largest automaker Stellantis—manufacturer of 14 makes, including Jeep, Maserati, and Chrysler—will become the second-largest shareholder of Australian lithium miner Vulcan Energy Resources.
To fuel its ongoing electric vehicle sales, the carmaker will pay $76 million (US$52.45 million) to acquire an eight percent stake in Vulcan.
The move comes as electric automakers explore ways to secure upstream supply chains amid soaring lithium prices—lithium hydroxide is critical for manufacturing electric vehicle batteries.
Vulcan has plans to produce lithium hydroxide from brine fields in the Upper Rhine Valley in Germany using geothermal energy, which it says will leave a "net-zero carbon footprint."
Vulcan and Stellantis last year signed a five-year agreement for the supply of a minimum of 81,000 metric tons and a maximum of 99,000 metric tons of lithium hydroxide—this deal will now be extended until 2036.
Francis Wedin, managing director of Vulcan, said the investment from Stellantis was a "strong statement" by one of the world's largest automakers.
"We are fully aligned with Stellantis' decarbonisation and electrification goals, which represent some of the most ambitious in the industry," he said in a statement on June 24. "It is encouraging to see a leading automaker investing in local, decarbonised lithium production for electric vehicles."
"Making this highly strategic investment in a leading lithium company will help us create a resilient and sustainable value chain for our European electric vehicle battery production," according to Carlos Tavares, CEO of Stellantis. "We continue our quest of forming strong relationships with partners who share our values."
Climate Change Policy Drives Up Demand for LithiumThe company has one of the most significant electrification projects of any automaker globally, with plans for 100 percent of its passenger car sales in Europe to be electric-powered vehicles by 2030.
As the climate change movement takes off in developed countries, demand for lithium hydroxide has soared as governments and businesses push for greater electrification of car networks, as well as larger battery storage to support electricity grids.
This, in turn, has driven up the price of the mineral from $17,000 per metric ton in 2021 to $78,032 per metric ton in 2022.
In response, the founder of Tesla, Elon Musk, said his company could even get involved in mining and extraction of lithium to drive down costs.