Auto crisis in Germany – Here is the solution: European Lithium, BMW, and Porsche

Batteries and lithium as a growth market

According to Grandview Research, the European lithium market is expected to reach a volume of USD 21.08 billion by 2030, corresponding to an average annual growth rate of 12.7%. The European battery market is even expected to grow by more than 20% per year during the same period, according to Grandview Research. Where is this growth coming from? The push to promote and process critical raw materials more extensively within Europe stems from a multitude of crises and the current tariff conflict. Raw materials on which large parts of European growth, jobs and thus prosperity depend should be securely available. European policy supports these efforts through initiatives such as the Critical Raw Materials Act (CRMA). The advantages of a European focus on raw materials for automotive manufacturers include: improved supply chain security, reduced geopolitical risks, sustainability benefits through reduced CO2 emissions, and shorter transport routes. Nevertheless, challenges such as securing financing and competition with established global players remain. A large part of the solution could be the Company European Lithium, which is developing a large lithium mine in Wolfsberg, Austria.

European Lithium to start production in 2027: The concept that even BMW finds convincing

Wolfsberg stands for a high-grade lithium resource with an average grade of 1% lithium hydroxide and a total resource of 12.88 million tonnes, based on measured, indicated, and inferred resources in Zone 1. Drill results indicate that this resource could be significantly expanded. European Lithium plans to begin production in 2027. The mined lithium will be further processed by partners in Saudi Arabia and then transported to battery factories in Europe. Processing the raw material in the Middle East offers European Lithium the opportunity to generate additional margins thanks to particularly low energy costs from solar energy.**

The fact that European Lithium's plans are very realistic is also demonstrated by an existing purchase agreement with BMW. BMW has already transferred USD 15 million to a subsidiary of European Lithium. These funds will help to drive forward the planned projects. The sale of shares in Critical Metals Corp. held by European Lithium has also repeatedly brought funds into European Lithium's coffers over the past few years. Although the Company is currently unable to offer positive cash flows, analysts such as those from First Berlin see great opportunities in European Lithium's shares.

Auto decision-makers see trend toward direct investments in mines

The fact that the Company was able to convince BMW of its merits and that the Wolfsberg project is to become one of three pillars for BMW's lithium supply provides good arguments for these positive expectations. Other automakers, such as Porsche, are also focusing on European supply chains for batteries in the medium term. Porsche itself cites supply security, short transport routes, and a low carbon footprint as important criteria. Thomas Schmall, Head of Technology at Volkswagen, who also has indirect influence at the group's subsidiary Porsche, emphasized in a group publication as early as 2024: "A stable supply of raw materials has indeed become an important competitive factor. Not only for Volkswagen, but for the entire industry." Schmall emphasized that the group would take greater control over raw material production and processing, including direct access to, and direct investment in mines.

The transformation of the European automotive industry is inextricably linked to the security of supply of critical raw materials such as lithium, and the establishment of robust supply chains in this area. With its Wolfsberg project, European Lithium plays a central role as potentially the first lithium producer in Europe. The project is geologically promising and has successfully overcome significant regulatory hurdles, such as environmental assessments. The strategic off-take agreement with BMW underscores the project's relevance for the European automotive industry. In addition, European Lithium also meets the industry's climate neutrality requirements – the planned processing plant will be powered by solar energy.

Investments are possible and necessary – European Lithium is the first port of call

While Volkswagen and Porsche shares are suffering from the tariff chaos, decision-makers in the industry are well aware that European supply chains for batteries are crucial for future success. Despite the recent bad news, companies such as BMW and Porsche remain well-positioned to make the necessary investments. European Lithium could benefit from this pressure to act. The Company plans to supply lithium from Wolfsberg starting in 2027. After a sharp rise in the summer, the share price has fallen back and could offer opportunities again in the medium term.