The Volkswagen Group and its battery company PowerCo SE announced that they intend to accelerate the build-up of their global battery business through rapid expansion to North America.
Volkswagen CEO Oliver Blume and the Canadian Minister for Innovation, Science and Industry, François-Philippe Champagne, signed in Wolfsburg Germany an Addendum to the non-binding Memorandum of Understanding (MoU) of August to identify suitable sites for a cell factory in Canada. The two parties will continue their cooperation in the areas of battery value creation, raw material supply chains and cathode material production which had been established in August.
Furthermore, PowerCo and materials technology group Umicore have agreed to investigate a strategic supply agreement on cathode material for North America. In September, the two companies had announced that they would cooperate in Europe by forming a joint venture for precursor and cathode material production.
Volkswagen Group CEO Oliver Blume: “Battery technology is key for our strategy ‒ which is why we are forging ahead with the expansion of battery business at full speed,” said Volkswagen Group CEO Oliver Blume. “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. This is just the beginning: The EV market in North America is at a turning point and we’re committed to investing across the entire region to leverage this historic chance for Volkswagen and our customers.”
The Honourable François-Philippe Champagne, Canada’s Minister of Innovation, Science and Industry added that, “The auto industry is vital to the Canadian economy, supporting hundreds of thousands of families. And as the world transitions to a cleaner and more sustainable economy, Canada’s highly-skilled workers will be key in helping to build the green vehicle of the future. Today’s announcement between Canada and VW represents another major step forward, continuing our shared work to grow Canada’s and Germany’s clean transportation sector and meet global and North American demand for zero emission vehicles.”
For the development of the cell production supply chains required in North America, PowerCo SE and Belgian materials technology group Umicore are intensifying their existing cooperation on the development of regional supply chains for sustainable battery materials. The partners today signed an MoU concerning a long-term strategic partnership to secure cathode materials for future cell production in North America.
Cathode material is crucially important for the transformation towards e-mobility, representing the key technological lever for battery performance and the main cost factor, accounting for about 50 percent of the total value of the cell. The two partners already agreed in September to establish a joint company which will supply key materials for the production of the PowerCo unified cell to PowerCo’s European battery cell plants from 2025. By the end of the decade, the partners will produce cathode materials and their precursors for 160 gigawatt-hours of cell capacity per year in Europe, corresponding to an annual production capacity of about 2.2 million all-electric vehicles. The transaction remains subject to regulatory approval and customary closing conditions.
Through the additional strategic supply agreement, the partners are extending their cooperation to Canada. The objective is to secure capacities at competitive prices as well as firm delivery agreements for cathode materials and their precursors for the future cell production of PowerCo SE. This concerns a volume of up to 40 gigawatt-hours (GWh) per year in 2030, corresponding to about 550,000 all-electric vehicles. Deliveries are planned to start in 2027. In order to supply several partners, Umicore plans to start construction of a plant for the large-scale industrial production of cathode materials and precursors in Canada from 2023 onwards. This plant will be the first of its type in North America.