“Attractive framework conditions”: VW consolidates plans for first battery factory in Canada

“Attractive Framework Position”
Volkswagen tightens plans for first battery factory in Canada

12/01/2022 at 3:50 pm

To switch to electric cars, Volkswagen is planning several battery cell factories – also overseas. A first agreement has already been signed with Canada on the delivery of essential raw materials such as lithium and cobalt. The resource-rich country is also the “logical choice” as a factory location.

Volkswagen has begun the search for a suitable location for the first battery cell factory in North America. Canada is “a logical choice” for a solution, a person with knowledge of the procedures told Reuters news agency. As part of an extension of the declaration of intent on raw materials signed a few months ago during Chancellor Olaf Scholz’s visit to Canada, suitable locations for them had to be defined.

Chief Technology Officer Thomas Schmall explained: “Powerco is about to jump across the Atlantic. The positioning of the framework in North America is highly attractive. The most competitive location wins the race.” The car company has bundled its battery activities into subsidiary Powerco.

Volkswagen signed a deal with Canada in August to secure access to key battery raw materials such as lithium, nickel and cobalt. In addition to building a supply chain in Canada, the Wolfsburg-based company also plans to invest in mining companies. The people of Lower Saxony want to set up six battery cell factories with partners in Europe alone to switch to e-cars and to do so requires huge amounts of raw materials.

USA changed subsidy policy

Volkswagen already announced a battery factory in North America and is already considering a second one. The search for a location is exciting in light of the fact that the United States has created incentives for investment at home with the so-called Inflation Reduction Act and other industrial policy measures.

In Europe, Volkswagen has joined forces with Belgian mineral technology and recycling group Umicor. Together the partners are investing around three billion euros to set up production capacity for battery materials for e-cars. VW subsidiary PowerCo also plays a central role here.