Volkswagen signs agreement to bring battery manufacturing to Canada


Volkswagen CEO Herbert Diess and Canadian minister Francois-Philippe Champagne sit in the foreground with German Federal Chancellor Olaf Scholz and Canada's Prime Minister Justin Trudeau standing during the memorandum signing Tuesday. Photo courtesy of Volkswagen

Aug. 23 (UPI) -- Volkswagen on Tuesday signed a memorandum of understanding with the Canadian government to bring some of its electric vehicle battery manufacturing to the country.

The European auto giant signed the deal in Toronto in the presence of German Chancellor Olaf Scholz and Canadian Prime Minister Justin Trudeau.

The deal is being viewed as an effort by Volkswagen to make sure it qualifies for electric vehicle tax credits in the United States. The U.S. government recently created new guidelines under the Inflation Reduction Act requiring electric batteries to be manufactured in North America to qualify for EV tax credits.

"Volkswagen has been vigorously pushing the transformation to e-mobility, recognizing the industry's responsibility in the global battle against climate change," Herbert Diess, CEO of Volkswagen Group, said in a statement. He signed the agreement with Canada's Minister of Innovation, Science, and Industry, Francois-Philippe Champagne.

"The group today not only offers the broadest range of electric models to customers but is also rolling out an ambitious battery and charging strategy. 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," Diess said.

Volkswagen said the PowerCo, its newly founded battery company, will play a central role in future planned cooperation efforts in the fields of battery value creation, raw materials supply chains and cathode material production in the North American region.

"As an automaker, we see compliance with stringent sustainability criteria as a top priority," Thomas Schmall, Volkswagen Group Board of Management member for Technology, said in a statement.

"For us, the availability of power from renewable sources and a raw materials sector with mines supplying materials conforming to the globally recognized environmental and social standards are crucially important. That is why Canada is an ideal partner for our e-mobility and battery strategy."