A Vancouver-based mining startup will supply Mercedes-Benz AG with carbon-neutral lithium hydroxide for use in the production of batteries for electric vehicles.

Mercedes-Benz AG will receive from Rock Tech Lithium an annual average of 10,000 tonnes of battery-grade lithium hydroxide beginning in 2026, which is enough to power approximately 150,000 electric vehicles. About two million Mercedes-Benz automobiles are sold annually around the world. By the end of the decade, Mercedes-Benz hopes to have transitioned entirely to electric vehicles.

As more and more automakers begin making their own battery packs, the race is on to secure the lithium supply needed to produce enough electric vehicles to meet their 2030 targets. Chinese electric vehicle manufacturer Nio purchased a 12% stake in Australian lithium mining firm Greenwing Resources in September, setting the stage for in-house battery pack production beginning in 2024.

Mercedes-Benz AG’s chief technology officer, Markus Schäfer, said in a statement that the partnership with Rock Tech “will play a key role in securing the lithium supply for our battery production in Europe.”

A converter operated by Rock Tech in Guben, Germany will supply battery-grade lithium hydroxide to the automaker’s battery partners, including Envision AESC in the United States and ACC and CATL in Europe. Automaker collaborates with Farasis and CATL in China.

According to Rock Tech, the agreement is worth over 1.5 billion over a five-year period and accounts for more than 40% of annual production from the planned converter capacity in Guben.

According to Mercedes-terms, Benz’s Rock Tech must only purchase from mines that have been through the Initiative for Responsible Mining Assurances’s auditing process. It is anticipated that by the year 2030, both firms will have collaborated to “create a roadmap to achieving CO2 neutral production” of lithium hydroxide.