Volkswagen Targets Canada for Extra Battery Supply

Paul Myles

TU-Editor

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25th August 2022

Volkswagen is hoping to expand its automotive battery production capabilities with a special agreement signed with the Canadian government.

The automaker has signed a Memorandum of Understanding with the government to promote e-mobility in the country and to explore opportunities across Canada’s automotive and battery supply chain. Both parties will investigate opportunities for Canada to contribute to Volkswagen’s global and regional battery supply chains.

Volkswagen’s newly formed battery company, PowerCo, will play a central role in these efforts and will drive forward the planned cooperation in the fields of battery value creation, raw materials supply chains and cathode material production in the North American region.

The rapidly growing global battery cell business is a key pillar of Volkswagen’s NEW AUTO strategy, which aims to make it a leading provider of sustainable and software-driven mobility. The plan is to quickly build up highly standardized cell production capacities totaling 240 gigawatt hours per year in Europe alone. In addition, there are plans to establish a dedicated gigafactory in North America. Possible production sites are currently being examined.

The deal was struck during Germany’s Chancellor Olaf Scholz’s visit to Canada and his various trade and energy supply discussions with Canada’s Prime Minister Justin Trudeau. Scholz, said: “I welcome that Volkswagen and Canada have signed a Memorandum of Understanding on battery value creation today. This is excellent proof that the cooperation with our close friends and allies in Canada is further deepening also in the context of raw material security and may encourage other companies to follow.”

Dr Herbert Diess, CEO of Volkswagen Group, added: “Volkswagen has been vigorously pushing the transformation to e-mobility, recognizing the industry‘s responsibility in the global battle against climate change. The Group today not only offers the broadest range of electric models to customers but is also rolling out an ambitious battery and charging strategy. Working hand in hand with governments around the world is an absolute prerequisite to meet our climate goals and I want to thank the Canadian government for their support. The supply of battery raw materials and the production of precursor and cathode materials with a low carbon footprint will allow for a fast and sustainable ramp- up of battery capacity, a key lever for our growth strategy in North America.”

— Paul Myles is a seasoned automotive journalist based in Europe. Follow him on Twitter @Paulmyles_