Tag: Mercedes-Benz

  • European Auto Sector Feels Strain as China’s Rare Earth Export Curbs Disrupt Supply Chains

    European Auto Sector Feels Strain as China’s Rare Earth Export Curbs Disrupt Supply Chains

    The European automotive sector is facing mounting pressure following China’s sweeping export restrictions on rare earth elements, which are critical to electric motors, high-tech components, and defense systems. Several parts suppliers have already suspended production, and major automakers like Mercedes-Benz and BMW are actively seeking ways to mitigate the risk of supply shortages.

    China’s decision in April to halt exports of a wide array of rare earths and related magnets has sent shockwaves through global industries, underlining Beijing’s dominant position—it produces about 90% of global rare earths and nearly 100% of heavy rare earths. The restrictions, introduced as part of broader trade tensions with the U.S., apply globally and have upended tightly synchronized supply chains.

    Mercedes-Benz production chief Joerg Burzer revealed that while its production remains unaffected for now, the company is working with suppliers to build “buffers” and stockpiles. Meanwhile, BMW confirmed supply disruptions within its supplier network, though its own production lines continue operating. Swedish airbag maker Autoliv and German electronics association ZVEI both confirmed the situation is under constant review, with task forces now in place.

    According to CLEPA, Europe’s auto supplier association, only 25% of export license requests from suppliers have been approved by China, with many rejected on “highly procedural grounds.” The group warned that additional factory shutdowns are likely.

    The issue is further complicating the already fragile geopolitical standoff between China and the U.S. President Donald Trump, who recently scaled back punitive tariffs following market turbulence, has accused China of violating recent truce terms. Chinese President Xi Jinping and Trump are expected to discuss the curbs in an upcoming call, with rare earths expected to top the agenda.

    With few viable alternatives to Chinese supply in the short term, auto manufacturers are scrambling to innovate. BMW has introduced magnet-free electric motors, while ZF and BorgWarner are developing low- to zero rare earth models—but commercial scalability remains years away.

    “There is no solution for the next three years except to come to an agreement with China,” said Andreas Kroll, managing director of Noble Elements, a rare earth importer.

    As rare earth supplies dwindle and diplomatic tensions escalate, Western governments are under growing pressure to accelerate diversification efforts. Brussels has already identified 13 non-EU mining projects to help reduce critical mineral dependency, and the EU’s industrial strategy chief Stephane Séjourné emphasized the urgency: “The export curbs increase our will to diversify.”

  • Over €4 billion secured for European battery production

    Over €4 billion secured for European battery production

    ACC has taken out a loan of 4.4 billion euros, increasing the funding for the construction of three gigafactories for lithium-ion battery cell production in France, Germany, and Italy, and for R&D. Shareholders Stellantis, Total, and Mercedes-Benz will also inject additional capital, leading to a change in ownership structure. 

    Automotive Cells Company says the €4.4 billion secured is “one of Europe’s largest-ever debt raisings in this industry” to develop four “blocks of production” in addition to the one in operation in Billy-Berclau/Douvrin in France. ACC will reportedly build a second block in Douvrin and plans another in the German town of Kaiserslautern and another in Italy in Termoli.

    By 2030, the joint venture of Stellantis, Total, and, since September 2021, Mercedes-Benz will aim for total battery cell capacities of at least 120 GWh. The Termoli plant will have a capacity of 40 GWh, while ACC is working towards upgrading the French and German sites to 40 GWh each to complete the bill.

    The current production capacity at Douvrin is set at more than 13 GWh per year and is due to be completed by the end of 2024. With five of these blocks, ACC would have an annual capacity of 65 GWh; thus the previously announced expansion with additional production blocks.

    The debt package will contribute to financing these capacities and is fully underwritten by a consortium of commercial banks, BNP Paribas, Deutsche Bank, ING, Intesa Sanpaolo, and supported by Bpifrance, Euler Hermes, and SACE.

    Stellantis, Mercedes-Benz and Total subsidiary Saft also participated in a capital increase (of undisclosed value). By the end of March 2024 and with the subsequent capital injection, Stellantis will own 45% of ACC’s shares, Mercedes-Benz 30% and Saft 25%.

    Both carmakers behold, this confirmed their “commitment as leading shareholders and customers of ACC’s battery modules”. Saft will continue working with ACC as a long-term shareholder and for technological know-how.

    Commenting on the loan, Yann Vincent, CEO of ACC, said this was “clear evidence of the confidence that is placed in the ACC project. Beyond this operation, we will determine our needs as and when we conclude additional contracts.”

    ACC was created by Total and Stellantis in 2020, with Mercedes joining one year later. Apart from the Gigafactory in France, ACC also runs an R&D center operational since 2020 in Bruges, near Bordeaux, and an Industrial Excellence Center in Nersac, in the New Aquitaine region. The company employs more than 1,500 people in France, Germany, and Italy. It also has received support from all three states and the European Union.

  • Neometals joint venture to build battery shredding plant for Mercedes

    Neometals joint venture to build battery shredding plant for Mercedes

    Australia’s Neometals Ltd said on Wednesday that its battery recycling joint venture will build a battery shredding plant in southern Germany for Mercedes-Benz.

    The deal by Primobius, which is 50% owned by Neometals and 50% by German engineering firm SMS Group, represents its first commercial recycling plant supply agreement to a global automaker, it said in a statement to the ASX.

    Using Primobius technology, the plant will provide shredded battery material to the Mercedes LIB Recycling Plant, which will recover materials including lithium, cobalt, nickel and manganese.

    This will be fed back into production of a targeted 50,000 battery modules for installation into new Mercedes vehicles.

    Primobius will be responsible for the engineering, equipment supply and installation of the plant, the company said in a statement.