From a Canadian Mine to a German EV: Rock Tech Lithium, BASF, and Volkswagen are Reducing Dependence on China

Rock Tech Lithium: The Strategic Shift to Canada

Rock Tech Lithium has undergone a remarkable transformation over the past 18 months. While the Guben project remains in its portfolio, the focus is now increasingly on Canada. The framework conditions there have fundamentally improved under Prime Minister Carney. Government subsidy programs have been launched, and permitting processes have been accelerated. Particularly attractive are the significantly lower energy prices in Ontario, where hydroelectric power is available at a fraction of the cost of industrial electricity in Germany. Political support at the federal and provincial levels has reached a new level, which is why the company has declared its Canadian business its top priority.

Vertical integration is at the heart of the Canadian strategy. Unlike in Germany, where the company would be reliant on raw materials from the global market, Rock Tech owns its own mine in Ontario, located right next to the planned converter. Georgia Lake supplies the spodumene, and the Red Rock plant processes it into lithium hydroxide—a one-stop value chain. The planned GP/LP financing model is central to this. Rock Tech acts as the general partner and manager, receives fees, but holds only 10–20% of the shares. This generates revenue even during the construction phase and creates favourable cash flow dynamics for investors.

The definitive feasibility study (DFS) for both Canadian projects will begin shortly and is expected to be completed by the end of the year at the latest. The final investment decision (FID) is targeted for early 2027, with production at the mine scheduled to begin in mid-2028 and at the converter by the end of 2028. At current prices and assuming 100,000 metric tons of spodumene concentrate from the mine, this alone could generate millions in operating profits. For financing in Canada, the company has secured an important partner in the BMI Group, which intends to provide CAD 200 million. At the same time, Rock Tech is expanding its capital market presence with an Xetra listing in Frankfurt and a planned dual listing on NASDAQ. The Guben project will continue but will be implemented with a similar structure and cost-cutting measures. The share is currently trading at around CAD 0.86.

BASF: Undergoing a Multi-Billion-Dollar Restructuring

Chemical giant BASF is pushing ahead with its transformation at full speed. The company relies on lithium as an essential raw material for its cathode business. It is pursuing a multi-pronged strategy to secure this critical resource. On one hand, it plans to recycle the material at its Schwarzheide facility, which processes 15,000 metric tons of used batteries annually. On the other hand, the company has secured access to primary raw materials through long-term supply contracts and strategic partnerships, such as with CATL. In China, a joint venture with Shanshan is strengthening its presence in the world's largest battery production hub.

The first tranche of the share buyback program, totaling EUR 1.5 billion, expires at the end of June. At the same time, BASF is set to receive a significant inflow of funds. The European Commission has given the green light for the sale of the coatings division to Carlyle, which will bring BASF approximately EUR 5.8 billion. In parallel, the company is continuing to drive its restructuring forward. The "CoreShift" cost-saving program aims to reduce fixed costs in the core business by up to 20% by 2029. EUR 1.9 billion has already been realized from a previous cost-saving program.

The new integrated site in Zhanjiang is BASF's largest single investment in the company's history. The plant, which cost EUR 8.7 billion, has been operational since early 2026 and is expected to become profitable starting in 2027. The site is technically state-of-the-art, digitized, and consistently relies on renewable energy. Nevertheless, uncertainty remains high. CEO Markus Kamieth warned of potential supply chain disruptions due to the conflict in the Middle East and a looming oil price shock. The Iran Deal should resolve these issues for the time being. The lowered forecast for 2026, as well as ongoing currency effects, indicate that the group's restructuring will still take time. The half-year results on July 30 will reveal whether the strategy is paying off. The share is currently trading at around EUR 48.895.

Volkswagen: Between Stability and Transformation

New vehicle registration figures for May paint a mixed picture. While Volkswagen clearly leads the manufacturer rankings with a 19% market share, it has recorded a nearly 9% decline in sales. The overall market is stagnating. While German manufacturers are losing ground, registrations for BYD and Tesla in the electric vehicle segment are skyrocketing. Purely electric vehicles already account for a quarter of all new registrations. This trend is forcing Volkswagen to rethink its strategy fundamentally. The latest quarterly figures underscore the urgency to act. Revenue fell by 2% to EUR 75.7 billion, and operating profit plummeted by 14.3%. The core brand's operating margin stands at a meagre 3.3%, well below its self-imposed 2030 target of 8–10%. At least net cash flow improved, and overhead costs were reduced by just under EUR 1 billion.

China remains the biggest cause for concern. Sales plummeted by nearly 15% in the first quarter, and VW's market share for electric vehicles stands at just 2.7%. BYD sold nearly fourteen times as many electric vehicles in May. The counterstrategy calls for exclusive models for the Chinese market and an accelerated push toward electrification. At least VW was able to displace BYD from the top of the overall market again at the start of the year. In Europe, however, Volkswagen is able to defend its status as the BEV market leader with a share of around 27%. Deliveries of fully electric vehicles grew by 66% in Europe in 2025. With the ID. Polo and the ID. Cross, the company now aims to tap into the mass market at a price of under EUR 30,000.

The annual shareholders' meeting in mid-June underscored the urgency of the situation. The majority of the Executive Board members consider the situation a threat to the company's very existence. The company is attempting to counter this with a strict cost-cutting program, including, for example, eliminating 50,000 jobs by 2030, reducing production capacity in Europe by an additional 500,000 vehicles, and streamlining its model lineup. Annual net savings of more than EUR 6 billion are to be achieved by 2030. The approved dividend of EUR 5.26 per preferred share has come under criticism amid a decline in profits. Whether the announced 2026 electric vehicle offensive—featuring 20 new models—and the partnerships with Rivian and Xpeng will bring about a turnaround remains to be seen in the coming quarters. The share is currently trading at around EUR 80.70.

The Canada–Germany strategic axis in the lithium sector is promising, but operational execution remains the key driver of returns. Rock Tech Lithium is positioning itself as a potential game-changer for independent raw material supply through vertical integration and its own mine in Ontario. BASF is pushing ahead with its multi-billion corporate restructuring, but continues to struggle with currency effects and uncertainties in day-to-day operations. Volkswagen is defending its market leadership in Europe, while the dramatic downturn in China is weighing on the group's profitability and forcing severe cutbacks. The direction is right; the real test is coming now.