Volkswagen Group and Canada partner for sustainable battery supply chain in North America

Volkswagen CEO Dr. Herbert Diess, and Canadian minister Francois-Philippe Champagne (foreground), German Federal Chancellor Olaf Scholz and Canada’s Prime Minister Justin Trudeau.

Volkswagen AG and the government of Canada aim to promote e-mobility in the country and to explore opportunities across Canada’s automotive and battery supply chain.

This was agreed in an MoU signed yesterday in Toronto by Volkswagen CEO Herbert Diess and Canada’s Minister of Innovation, Science, and Industry, Francois-Philippe Champagne, in the presence of German Chancellor Olaf Scholz and Canadian Prime Minister Justin Trudeau.

Both parties plan to explore opportunities for Canada to contribute to Volkswagen’s global and regional battery supply chains. PowerCo, VW Group’s newly founded battery company, has 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.

PowerCo SE is responsible for all global VW Group activities along the battery value chain, securing battery cell supply for Volkswagen’s e-mobility push. The rapidly growing global battery cell business is a key pillar of Volkswagen’s ‘NEW AUTO’ strategy, which aims to make Volkswagen the 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.

Dr. Herbert Diess, CEO of Volkswagen Group: “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.“

For the development of sustainable battery production, both parties intend to boost cooperation based on recognized ESG (Environment, Social, Governance) criteria between PowerCo and the Canadian mining sector, which is seen as a world leader in terms of responsibility and transparency. For this purpose PowerCo is planning to establish a new, dedicated liaison office in Canada. A key focus of cooperation is the supply of critical raw materials such as lithium, nickel and cobalt.

Both parties see significant prospects for Volkswagen and PowerCo to ramp up cathode material production together with partners and to offer Canadian suppliers an opportunity to act as raw material suppliers, refiners and processors.

With its vast raw material resources, good infrastructure and highly developed automotive industry with considerable production expertise and highly qualified workforce, Canada sees itself outstandingly well-positioned for joint projects.

The Volkswagen Group brands plan to offer the most comprehensive electric product portfolio in North America with more than 25 battery-electric models by 2030; at the same time, strong regional capabilities for EV research and development, vehicle assembly, component production and supply relationships are being expanded across the North American continent.