Volkswagen to build North America’s first EV battery plant in Canada to get US subsidies

Volkswagen to build North America’s first EV battery plant in Canada to get US subsidies
The new updated Volkswagen AG (VW) logo sits on display in the VW exhibition hall on the opening day of the IAA Frankfurt Motor Show in Frankfurt, Germany, on Tuesday, Sept. 10, 2019. The 68th IAA show runs from Sept. 12-22. Photographer: Alex Kraus/Bloomberg

Volkswagen AG said on Monday it would build its first battery cell factory in North America in Canada, enabling its cars to qualify for U.S. government subsidies that require electric vehicles to operate, Reuters reported. The battery is manufactured using North American materials.

Under the U.S. Inflation Reduction Act (IRA), cars can only get thousands if a certain percentage of critical minerals in the battery are mined or processed in the U.S. or a country with which the U.S. has a free trade agreement, or recycled in North America. dollar subsidy.

Volkswagen confirmed in December that it was looking for a location in Canada to build a factory in Canada, six months after signing a memorandum of understanding with the Canadian government to ensure access to key raw materials needed for batteries.

“We are fast-tracking the execution of our North American strategy with the decision to build battery cell production in Canada and a Scout-branded plant in South Carolina,” VW Chief Executive Oliver Blume said in a statement on Monday. explain.

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The automaker said last week that its Scout brand will build a $2 billion (IT House Note: currently about 13.88 billion yuan) manufacturing plant near Columbia, South Carolina, for the production of trucks and SUVs, and plans to Production begins in 2026.

Volkswagen has long said it is working to build regional supply chains in Europe, North America and China for electric vehicle production, given high transport and logistics costs, supply chain risks and geopolitical tensions.

The company said last week that the IRA had spurred the company’s decision to prioritize investment in North America, adding that plans for battery plants in Europe were still underway, but it was waiting to see if the IRA spurred better incentives in Europe.

Source: Reuters