Volkswagen Group & Canada to build sustainable battery factory

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by KnowESG,

Volkswagen AG

Picture of Volkswagen Group and Canada Planning to build North America's sustainable battery factory to support the shift to clean energy

Volkswagen AG and the Canadian government intend to develop e-mobility in Canada and explore the potential of the Canadian automotive and battery supply chains.

This was agreed in a memorandum of understanding (MoU) signed recently in Toronto by Volkswagen CEO Dr. Herbert Diess and François-Philippe Champagne, Canadian Minister for Innovation, Science, and Industry, in the presence of Federal Chancellor Olaf Scholz and Canadian Prime Minister Justin Trudeau. 

Both parties will consider how Canada can help the company's global and regional battery supply chains. PowerCo, the group's newly formed battery business, will play a key role and support the planned collaboration in battery value creation.

PowerCo unifies and is accountable for all global group activities along the battery value chain, as well as ensuring the supply of battery cells for Volkswagen's e-mobility offensive. 

The rapidly expanding worldwide battery cell market is a key pillar of Volkswagen's NEW AUTO strategy, which aims to position Volkswagen as the leading provider of sustainable and software-driven mobility. 

A highly standardised cell production capacity of 240 gigatonne hours per year is to be established shortly in Europe alone. Furthermore, there are plans to build their own gigafactory in North America. Potential production sites are currently being examined.

Federal Chancellor Olaf Scholz said: 

"I welcome the fact that Volkswagen and Canada today signed a memorandum of understanding on battery value creation. This is excellent evidence that collaboration with our close friends and allies in Canada continues to deepen, including on commodity security, and may encourage other companies to follow suit."

François-Philippe Champagne, Minister for Innovation, Science and Industry, said: 

"Canada is fast becoming the green supplier of choice for major automotive companies, including leading European manufacturers, as we transition to a cleaner, greener future. By partnering with Volkswagen, Canada reinforces its leadership 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."

Volkswagen CEO Dr. Herbert Diess, said: 

“Volkswagen has pushed ahead with the transformation to e-mobility with great vigour and has recognised the responsibility of the industry in the global fight against climate change. The group not only offers its customers the widest range of electric models but is also rolling out an ambitious battery and charging strategy. Working hand-in-hand with governments around the world is an absolute requirement to achieve our climate goals. I would like 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 enable rapid and sustainable expansion of battery capacities—an important lever for our growth strategy in North America."

Thomas Schmall, Volkswagen Group Board Member for Technology, said:

"As a car manufacturer, we see compliance with strict sustainability criteria as our top priority. For us, the availability of electricity from renewable sources and a resource sector with mines that deliver material according to globally recognised environmental and social standards are crucial. Therefore, Canada is an ideal partner for our e-mobility and battery strategy.”

Source: Volkswagen Group

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