Mercedes-Benz has secured lithium for 150,000 electric cars a year.

The German-Canadian start-up Rock Tech Lithium is to supply Mercedes with 10,000 tons of lithium hydroxide per year from 2026.

The carmaker announced this on Thursday in Stuttgart.

The two companies had already signed a declaration of intent in August as part of Chancellor Olaf Scholz's trip to Canada.

The supply agreement that has now been concluded substantiates this strategic partnership.

The companies did not comment on the financial scope.

Gustave parts

Business correspondent in Stuttgart.

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The lithium hydroxide is to come from Guben in Lower Lusatia in Brandenburg, where Rock Tech is building the first European lithium converter that produces the lithium hydroxide required for the production of electric car batteries from the raw material lithium.

The factory is scheduled to start operating in 2024.

Most recently, there was talk of an annual production of 24,000 tons.

Mercedes would thus be one of the major buyers of the factory, which according to the plans will have 160 employees.

Lots of lithium from Australia

According to the statement, the lithium required for further processing in Brandenburg should come exclusively from mines that comply with high environmental and human rights standards.

In addition, the companies would work to ensure that production would be CO2-neutral from 2030.

According to Rock Tech, by 2030 half of its raw materials will come from the recycling of old batteries.

The raw materials required for the batteries are one of the most important criticisms of the transformation to electromobility.

In comparison to other raw materials such as cobalt, however, the mining of lithium is much less delicate.

According to the responsible US authority, more than half of global lithium production comes from Australia, a good quarter from Chile and a seventh from China.

A good two-fifths of global reserves are in Chile.

There are also deposits in the Upper Rhine Graben.

Car manufacturers are in a race to secure the necessary raw materials for the batteries.

For less than a tenth of Mercedes production

Mercedes currently sells a good 2 million cars a year.

If sales remain above this mark as targeted, the supply agreement with Rock Tech Lithium is sufficient for significantly less than 10 percent of Mercedes cars.

The group wants to sell only electric cars by the end of the decade, but always restricts that this only applies where “market conditions allow”.

Mercedes emphasized that the agreement strengthens the "local sourcing strategy" for the construction of electric cars.

The agreement, together with other partnerships, plays a "key role in securing the lithium supply for our battery production in Europe," says Mercedes board member Markus Schäfer, who is responsible for purchasing, among other things.