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 U.S. subsidies
which require that electric vehicles' batteries are made with
North American materials.
Under the U.S. Inflation Reduction Act(IRA) guidance, cars
only qualify for thousands of dollars in subsidies if a
proportion of critical minerals in their battery were extracted
or processed in the United States or a country with a U.S.
free-trade agreement, or recycled in North America.
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.
"With the decisions for cell production in Canada and a
Scout site in South Carolina we're fast-forwarding the execution
of our North American strategy," Chief Executive Oliver Blume
said in a statement on Monday.
The carmaker said 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 carmaker 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.
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
Friederike Heine and Angus MacSwan)
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