Volkswagen AG, Govt. of Canada explore opportunities in the EV battery supply chain

German automaker, Volkswagen AG (Volkswagen), on Tuesday (August 23) signed a Memorandum of Understanding (MoU) with the Government of Canada to promote electric mobility in Canada and explore opportunities across automotive and battery supply chain.

The MoU was signed between Volkswagen Group CEO, Herbert Diess and Canada's Minister of Innovation, Science, and Industry, François-Philippe Champagne in the presence of German Chancellor, Olaf Scholz and Canadian Prime Minister, Justin Trudeau in Toronto. 

"Canada is quickly becoming the green supplier of choice for major auto companies, including leading European manufacturers, as we transition to a cleaner, greener future," said François-Philippe Champagne, Canadian Minister of Innovation, Science and Industry. "By partnering with Volkswagen, Canada is strengthening its leadership role as a world class automotive innovation ecosystem for clean transportation solutions. Canada is committed to building a strong and reliable automotive and battery supply chain here in North America to help the world meet global climate goals."

The fast-growing global battery cell business is a key pillar of Volkswagen's NEW AUTO strategy.  

In this strategy, PowerCo SE (PowerCo), the newly founded battery company of the Volkswagen Group will be playing a central role in the newly formed cooperation and ramping up the company's global battery business in the fields of battery value creation, raw materials supply chains and cathode material production in the North American region.

"The plan is to quickly build up highly standardized cell production capacities totaling 240-gigawatt hours per year in Europe alone," Volkswagen stated in the official release. "In addition, there are plans to establish a dedicated gigafactory in North America. Possible production sites are currently being examined."

As a part of establishing sustainable battery manufacturing and reliable raw material supply, the two entities will establish a new liaison office in Canada, with the focus on cooperating on the supply of critical battery raw materials such as lithium, cobalt, and nickel.

Both Volkswagen and the Canadian Government foresee promising scope for building up cathode material and to offer Canadian suppliers an opportunity to act as raw material suppliers, refiners, and processors.

"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," said Herbert Diess, CEO of the Volkswagen Group.

Volkswagen Group intends to offer a comprehensive electric vehicle portfolio to the consumers in North America, to that end the automaker is expected to launch more than 25 battery electric vehicles by end of 2030.