General Motors Announces a Key North American Nickel Supply Deal for Electric Vehicle Batteries
【Summary】General Motors announced the signing of a term sheet with Vale Canada Limited, a subsidiary of Brazilian mining company Vale S.A., for a long-term supply of battery grade nickel sulfate. The nickel for GM's Ultium batteries will come from Vale’s proposed processing plant in the city of Bécancour, Québec, Canada. Vale is North America’s largest producer of finished nickel.
U.S. automaker General Motors announced the signing of a term sheet with Vale Canada Limited, a subsidiary of Brazilian mining company Vale S.A., for the long-term supply of battery grade nickel sulfate. The nickel will come from Vale's proposed processing plant in the city of Bécancour, Québec, Canada.
Vale is North America's largest producer of finished nickel.
Nickel sulfate is used in the production of positively charged cathode active materials for nickel-based lithium-ion batteries, which offer higher energy density than traditional lithium ion batteries to deliver longer ranges for EVs.
GM committed to buy 25,000 metric tons of battery-grade nickel sulfate per year from Vale Canada's proposed plant located west of Montreal. The amount of nickel is enough for GM to build roughly 350,000 electric vehicles a year, which would help the automaker meet its EV production goals as the automakes transitions to building only electric passenger vehicles by 2035.
"GM's dedicated cross-functional organization — including experts from global purchasing and supply chain, corporate development, legal, finance and treasury — is strictly focused on building a secure, sustainable, scalable and cost-competitive EV supply chain," said Doug Parks, GM executive vice president of Global Product Development, Purchasing and Supply Chain. "Their work has already allowed GM to sign multiple binding agreements to secure the battery raw material to support 1 million units of annual EV capacity in North America in 2025.
The nickel sulfate will be used for the cathodes of GM's Ultium batteries, which will power the automaker's EVs, including the new Chevrolet Silverado EV, Blazer EV and Equinox EV, Cadillac LYRIQ, GMC Sierra EV, and the GMC HUMMER EV.
Vale says it will begin deliveries to GM in the second half of 2026.
"This is a momentous agreement for Vale Base Metals that brings a key partner in GM into this first-of-its-kind facility for Canada and North America," said Vale Executive Vice President of Base Metals, Deshnee Naidoo. "The proposed nickel sulfate project would utilize high purity, low-carbon nickel from our Canadian refineries and is a natural extension for the business, offering diversified sales and a fast entry and anchor point into the North American electric vehicle market."
In addition to the supply agreement, Vale and GM will also collaborate on ways to harvest recycled raw metals from used EV batteries to create a more sustainable supply chain.
"The signing of this agreement confirms that the biggest players in the industry want to invest here and enter our supply chain. We have the resources and the expertise to produce the cleanest battery in the world, and this news will certainly contribute to that," said Pierre Fitzgibbon, Québec's Minister of Economy, Innovation and Energy, Minister Responsible for Regional Economic Development and Minister Responsible for the Metropolis and the Montréal Region.
Earlier this year, GM's rival Tesla also signed a deal with Vale S.A. to supply nickel.
In Feb 2021, Tesla Chief Executive Elon Musk tweeted about the challenges of sourcing nickel for EV batteries and wrote that it's the company's "biggest concern for scaling lithium-ion cell production."
In March 2021, GM announced plans to become a carbon neutral company by 2040. To reach that aggressive goal, the automaker plans to phase out internal combustion engine models, including light-duty trucks and SUVs by 2035 in what will be a historic move for the company that has been building gas-powered vehicles since 1908.
These plans rely on a steady and reliable supply of raw materials to produce batteries for millions of EVs. The supply agreement with Vale S.A. is another important step towards GM's goal of becoming an electric automaker.
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