“Attractive framework conditions”
VW makes plans for Canada’s first battery factory a reality

01/12/2022, 3:50 p.m.

For the switch to electric cars, Volkswagen is planning several battery cell factories – also abroad. The first agreements on the delivery of the required raw materials such as lithium and cobalt have already been signed with Canada. The resource-rich country is also “a logical option” as a factory location.

Volkswagen begins looking for a suitable location for a first battery cell factory in North America. Canada is “a logical option” for the settlement, a person with knowledge of the processes told Reuters news agency. As part of an expansion of the declaration of intent on raw materials signed a few months ago during Chancellor Olaf Scholz’s visit to Canada, suitable locations were to be defined for them.

Thomas Schmall, Chief Technology Officer, explained: “PowerCo is about to jump across the Atlantic. The framework conditions in North America are very attractive. The most competitive site wins the race. The automaker has bundled its battery business into subsidiary PowerCo.

Volkswagen signed an agreement 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 is also planning investments in mining companies. The people of Lower Saxony want to set up six battery cell factories with partners in Europe just for the switch to electric cars and need large amounts of raw materials for this.

The United States changes its subsidy policy

Volkswagen had already announced a battery plant in North America and is already planning a second. The search for a location is exciting considering that the United States has created incentives for investment in its own country with the so-called Inflation Reduction Act and other industrial policy measures.

In Europe, Volkswagen has partnered with the Belgian mineral technology and recycling group Umicore. Together, the partners are investing around three billion euros in setting up production capacities for battery materials for electric cars. VW’s subsidiary, PowerCo, also plays a central role.