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WOLFSBURG, March 13 (Reuters) - Volkswagen said on Monday it will build its first North American battery
cell plant in Canada, granting its cars access to both Canadian
and U.S. subsidies as it works to localise its electric vehicle
production chain in the region.
Volkswagen confirmed in December it was looking for sites
for a plant in Canada after it signed a memorandum of
understanding with the country six months prior to secure access
to key raw materials for batteries.
Canada, which is home to a large mining sector for minerals
including lithium, nickel, and cobalt, is trying to woo
companies involved in all levels of the EV supply chain via a
multi-billion green technology fund to safeguard the future of
its manufacturing heartland in Ontario as the world seeks to cut
carbon emissions.
Cars with batteries from the plant will also qualify for
thousands of dollars in subsidies under the U.S. Inflation
Reduction Act, allocated to vehicles with a battery made with a
minimum proportion of critical minerals extracted or processed
in the United States or a country with a U.S. free-trade
agreement, or recycled in North America.
The U.S. Treasury is due to release details on this guidance
in March.
VW's Monday's announcement did not specify the size of the
investment or the capacity of the new plant, but board member
Thomas Schmall said in August the company was targeting 20
gigawatt hours of capacity at its first North American site.
Volkswagen has long said it is working towards setting up
regional supply chains in Europe, North America and China for EV
production in light of high transport and logistic costs, supply
chain risks and geopolitical tensions.
It announced last week its Scout brand would build a $2
billion manufacturing plant near Columbia, South Carolina for
trucks and SUVs, with production to start in 2026.
The IRA gave the company an incentive to prioritise
decisions on North American investments, it said last week,
adding plans for battery plants in Europe were still in place
but that it would wait to see whether the IRA spurred Europe to
offer better incentives.
(Reporting by Victoria Waldersee and Jan Schwartz, Editing by
Angus MacSwan, Kirsten Donovan)
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