Why is Mercedes-Benz buying lithium from the UAE? It's a strategic move to secure its EV future.

UAE-based Titan Lithium Industries has signed a multi-year supply agreement with Mercedes-Benz AG, valued at over USD 300 million (AED 1.1 billion). According to a joint announcement, the deal is more than a simple transaction; it represents a strategic shift for both the German automaker's electric vehicle supply chain and the UAE's growing role in the global clean energy economy. The Titan Lithium Mercedes-Benz agreement secures a critical material for the automaker's future.

The deal in detail

The core of the agreement will see Titan Lithium supply battery-grade lithium from its flagship refinery located in Khalifa Economic Zones Abu Dhabi (KEZAD). The multi-year deal is valued at over USD 300 million (AED 1.1 billion), with commercial supply scheduled to begin in 2028. This partnership makes Titan Lithium a key supplier in Mercedes-Benz's global battery materials supply chain, providing essential components for its expanding electric vehicle portfolio.

Why this matters for Mercedes-Benz

There is a straightforward way to understand this move: supply chain resilience. Previously, global automakers were highly dependent on a concentrated group of suppliers, primarily in Asia, for critical battery materials. This created a significant risk. The deal with Titan Lithium is a clear strategy to de-risk this dependency by diversifying its sources geographically. By securing a long-term supply of responsibly produced lithium from the UAE, Mercedes-Benz gains greater control and stability for its ambitious electrification roadmap. While Mercedes secures its supply, the broader ecosystem continues to evolve, with infrastructure like 15-minute EV chargers in Dubai being deployed to support the growing number of electric vehicles.

The UAE's strategic industrial play

What matters is not just the deal, but the national strategy behind it. This agreement is a significant milestone for the UAE's industrial and clean-energy ambitions. It aligns directly with government policy to localise strategic value chains and expand downstream manufacturing of critical materials. In effect, the UAE is leveraging its industrial capacity to pivot into the clean energy economy. This was a central topic at the recent World Future Energy Summit in Abu Dhabi, and this deal puts that strategy into practice.

HE Dr Sultan Al Jaber, the Minister of Industry and Advanced Technology, said, "This agreement reflects the UAE’s deliberate strategy to build globally competitive industrial value chains in critical sectors. By enabling advanced manufacturing partnerships between global manufacturers and UAE-based producers, the UAE continues to position itself as a reliable, long-term partner and the corridor to the economy of the future."

Looking forward: A new supply chain emerges

The implication for the industry is clear: the global race to secure raw materials for electrification is creating new economic corridors, and the UAE is positioning itself as a central hub. Titan Lithium, backed by over USD 2.5 billion in investment, is developing a facility with a planned capacity of 120,000 tons per year, signalling the scale of this ambition. This shift is visible across the Emirates, from industrial supply to commercial adoption, with companies like Safeline beginning to deploy BYD electric trucks on UAE roads.

Mr Vaibhav Jain, Founder and Chairman of Titan Lithium Industries Ltd, noted the significance of this shift. "Lithium is the backbone of the new energy economy, and this partnership reflects the UAE’s emergence as a trusted, long-term contributor," he said. "This agreement with Mercedes-Benz reinforces global confidence in the UAE’s ability to deliver critical materials responsibly, reliably, and at world-class standards."

Agreement details

The multi-year supply agreement between Titan Lithium Industries Ltd and Mercedes-Benz AG is valued at over USD 300 million (AED 1.1 billion). Commercial supply of battery-grade lithium is set to begin in 2028 from Titan Lithium's facility at KEZAD in Abu Dhabi.

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