Volkswagen Locks in Lithium for a Decade While 85,000 Jobs Hang in the Balance
Published on 07/17/2026 at 19:22 | Redaktion boerse-global.de
Volkswagen is pursuing a two-track strategy that pits a long-term bet on electric mobility against an increasingly bitter internal power struggle over costs and headcount. The group’s battery subsidiary PowerCo has just secured a guaranteed supply of lithium for the next ten years, investing $48 million for a 9.9% stake in Canadian miner Patriot Battery Metals. The deal includes a binding offtake agreement for 100,000 tonnes of spodumene concentrate annually, drawn from the Shaakichiuwaanaan project in Quebec, to feed PowerCo’s cell factories in Europe and North America. The message is deliberate: despite a sharp slowdown in EV sales outside Europe, Volkswagen is not wavering on its electrification roadmap.
The urgency of that long-term hedge is underscored by the group’s first-half delivery figures for 2026. Worldwide deliveries slipped 6.3% to 4,125,700 vehicles, with battery-electric volumes falling 5.8% to 438,500 units. The breakdown, however, reveals a stark regional divergence. In Europe, total deliveries rose 3.5% and BEV sales climbed 8.4%, keeping Volkswagen the region’s leading electric-vehicle maker. In China, the group’s most critical market, total deliveries collapsed 24% and BEV sales cratered 47.9%. North America was even worse for EVs, with a 68.8% plunge. The lithium partnership is designed to insulate the European strength and build a foundation for future growth elsewhere, but the China hole is deep.
That hole is one reason the boardroom has turned into a battlefield. Chief executive Oliver Blume, citing a 20% cost disadvantage versus rivals, has warned of up to 100,000 job reductions. According to Reuters, 50,000 cuts have already been agreed, and Blume floated the possibility of a further 50,000. On 9 July 2026, the supervisory board — where labour representatives and the state of Lower Saxony hold sway — blocked the management’s latest savings plan, which called for more than 85,000 job cuts, a reduction in annual production capacity to 9 million vehicles by 2030, a halving of the model range, and a 15% cut in investment. The works council has attacked Blume personally, and IG Metall has promised resistance. Management has reportedly threatened to call an extraordinary general meeting in September if no compromise is reached.
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The threat of plant closures looms over four German sites: Emden, Hanover, Zwickau and Neckarsulm, which together employ more than 45,000 people. While outright shutdowns have been postponed after the board’s veto, the possibility that contracts at those locations will simply be allowed to run out remains on the table. Meanwhile, the Osnabrück plant has become a separate negotiation, with Lower Saxony exploring the creation of a joint venture to produce components for Israel’s Iron Dome air-defence system alongside defence contractor Rafael. A dual-company structure — one entity for the real estate, another for operations — is under discussion, but Qatar, a major VW shareholder, has so far blocked the plan, adding another layer of complexity.
In the middle of this restructuring drama, Volkswagen has launched a new electric model aimed at the affordable end of the market. The ID. Cross, a compact crossover built on the MEB+ platform, made its world premiere in Switzerland and has been available for pre-order since 17 July 2026. The base price is 27,600 Swiss francs, with the top version — 211 hp, a 52 kWh battery and a WLTP range of 427 kilometres — priced at 37,800 francs. Deliveries are scheduled to begin in November. Whether a single new model can generate the operational momentum needed to offset the noise from the boardroom remains the open question for investors.
The shares are reflecting the uncertainty. Volkswagen stock traded at around €73.30 on Friday, virtually unchanged on the day, but down more than 30% year-to-date. The price is only about 6% above its 52-week low of €69.20 and a staggering 33% below the December 2025 high of €109.10. Deutsche Bank has kept a “Buy” rating and a €120 price target, pointing to the same split that the delivery numbers illustrate: solid European demand offset by persistent Chinese weakness. The next major catalyst is the half-year financial report due on 24 July, which will show whether the cost-saving measures already implemented are gaining traction and how deeply the China downturn is cutting into group profit.
The wider German industrial landscape adds context to the standoff. According to the Federal Employment Agency, the country lost 177,000 industrial jobs in the past year, with the auto sector accounting for 52,000 of them. Agency head Andrea Nahles has spoken of 15,000 factory jobs disappearing every month. The outcome of the VW negotiations — between management, the supervisory board, labour representatives, and key shareholders like Qatar — will send a signal far beyond Wolfsburg. With an extraordinary general meeting potentially on the horizon in September, the next few weeks will be decisive for both the company’s trajectory and the future of Germany’s most important industry.
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