Freshfields Bruckhaus Deringer (‘Freshfields’) is advising Umicore NV/SA (“Umicore”) on the creation of a joint venture with PowerCo SE, the Volkswagen AG (“Volkswagen”) battery subsidiary, to establish the first large-scale supply chain for sustainable batteries for electric vehicles in Europe. The partnership involves appr. €3 billion in investment, with Umicore sourcing and processing raw metals for the production of cathode materials required for Volkswagen’s European cell factories.

The deal is the first of its kind in Europe and will strengthen the resilience of Europe’s supply of precursor and cathode materials, a strategically important resource for EV batteries. Production will start in 2025, with the aim of reaching annual production capacity of 160 GWh in 2030, or the equivalent of 2.2 million fully electric vehicles. In addition to affording both partners a first-mover advantage in the fast-growing European e-mobility market, the landmark joint venture has also been hailed by the partners as a major milestone to help the European Union achieve its Green Deal ambitions.

At the same time, the partnership will focus on setting up a sustainable, transparent supply chain with high environmental and social standards, which will benefit from Umicore’s industry-leading expertise in the sustainable and responsible sourcing of raw materials.

The Freshfields team advising on the transaction is led by partner Deborah Janssens and principal associate Thibault Moust in Brussels. Advice in relation to IP and supply agreements is provided by partner Philipp Dohnke and principal associate Philipp Lehmann in Hamburg. Advice in relation to metal sourcing and processing is led by counsel Sara Barin in London. Antitrust advice is led by partner Laurent Garzaniti and principal associate Enrica Schaefer in Brussels.