© Reuters. FILE PHOTO: The Mercedes-Benz logo is seen at the 43rd Bangkok International Motor Show, in Bangkok, Thailand, March 22, 2022. REUTERS/Athit Perawongmetha

BERLIN (Reuters) – Mercedes-Benz has signed a supply agreement with Canadian-German Rock Tech Lithium Inc to receive on average 10,000 tons of battery-grade lithium hydroxide per year, the German carmaker said on Thursday.

The deal allows the luxury carmaker to supply its battery partners with raw material, starting in 2026, including a qualification period, in order to rapidly scale up production of fully electric vehicles, it said in a statement.

The deal, which comes shortly after the two groups said they would explore a strategic partnership, has a volume of 1.5 billion euros ($1.47 billion) and will cover enough lithium hydroxide for 150,000 cars a year, the companies said.

“This significant amount of lithium sourced directly from Rock Tech will help Mercedes Benz to advance localization of European production of state of the art battery cells,” Mercedes-Benz management board member Markus Schaefer said.

As part of the deal, Rock Tech Lithium plans to supply Mercedes-Benz battery partners from a converter based in Guben, Germany, helping the German luxury carmaker to go fully electric by the end of the decade where market conditions allow.

($1 = 1.0217 euros)

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