Canada is “logical option” for VW’s North American battery cell factory [Update]

Volkswagen and its battery subsidiary PowerCo SE are currently scouting locations for their first North American battery cell factory, and Canada is apparently at the head of the pack.

According to a source with knowledge of the discussions that spoke with Reuters, Canada is seen as “a logical option” for the factory and could soon be home to the automaker’s first cell plant outside of Europe.

UPDATE 8:57am PT: VW has now issued a press release confirming they are searching for a North American gigafactory, and have signed an addendum to their MOU with Canada “to identify suitable sites for a cell factory in Canada.”

“Battery technology is key for our strategy ‒ which is why we are forging ahead with the expansion of battery business at full speed. Canada is one logical option for the construction of a gigafactory in the region of North America. The country offers high sustainability standards and ideal economic conditions and the government of Canada has already proven to be a strong and reliable partner,” Volkswagen Group CEO Oliver Blume said.

In August Canada and VW signed a memorandum of understanding (MOU) that provided the German automaker with access to Canadian raw materials such as nickel, cobalt, and lithium.

If Canada is selected as the home of VWs battery cell factory, it would allow the automaker to further shorten their supply chains for their North American facilities, with the added benefit of avoiding the difficulties of tariffs and complicated tax regulations.

This is something that will be at the top of mind for VW, as board member for technology Thomas Schmall said, “PowerCo is about to jump across the Atlantic. The framework conditions in North America are highly attractive. The most competitive location wins the race.”

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