The global electric vehicle (EV) market is experiencing rapid growth, with major automakers accelerating their investments in R&D and production. As competition intensifies across the supply chain, a critical challenge has emerged: the rising demand for key raw materials such as cobalt. Industry experts warn that this could lead to supply shortages, prompting companies to secure long-term sources of these essential resources.
Geely Group recently made headlines by acquiring 9.69% voting shares in Daimler AG through its overseas entities. This strategic move, pending regulatory approval, highlights the growing trend of international collaboration in the EV sector. The deal underscores the importance of accessing advanced technologies, particularly in electric mobility and digital services. Li Shufu, CEO of Geely, emphasized the company’s commitment to respecting Daimler’s corporate culture while working together to achieve shared goals in innovation and sustainability.
This acquisition is not an isolated event. Global automakers are increasingly forming partnerships to strengthen their positions in the EV industry. For instance, BMW announced plans to produce the electric version of the MINI in China, potentially partnering with Great Wall Motor. Meanwhile, Japanese automakers like Nissan and Toyota are also expanding their electric vehicle portfolios, with significant investments aimed at capturing a larger share of the Chinese market.
Government policies are playing a crucial role in driving this transformation. Countries around the world are implementing regulations to promote cleaner transportation and reduce reliance on fossil fuels. France, for example, launched a large-scale tender for electric buses, aiming for full coverage of clean energy vehicles by 2025. Germany is considering restrictions on fuel vehicles, with a focus on transitioning public transport to electric alternatives. The European Union has also introduced financial incentives to support innovation in electric vehicle technology, including funding for battery development.
As the EV market expands, the demand for critical minerals like lithium and cobalt is surging. Prices for these materials have risen sharply in recent years, with cobalt tripling in value over two years and lithium prices more than doubling since 2015. Automakers are now actively seeking long-term supply agreements with mining companies to ensure stability. Tesla, for example, is negotiating with Chile’s SQM for lithium supplies, marking its first direct involvement in raw material sourcing. Similarly, Toyota Tsusho has invested in Australian lithium miner Orocobre to secure future supplies.
With the race to dominate the EV industry heating up, companies are not only investing in technology but also in the raw materials that power it. This shift reflects a broader strategy to control the entire supply chain and maintain a competitive edge in a rapidly evolving market. As governments continue to push for greener transportation solutions, the collaboration between automakers, tech firms, and raw material suppliers will be key to shaping the future of mobility.
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