VW Group and Canadian government team up to secure battery minerals

Rare earth minerals and other battery materials are becoming very important on the geopolitical scene. As this room to Quartz pointed out, China’s grip on minerals that fuel not only clean technology but other important things like medical imaging, came to a head for Japan in 2010. China managed to bring Japan to its knees cutting off supplies. This has led Japan to take a very different path when it comes to clean technology and could explain why Japanese automakers are clinging to hydrogen technology while the rest of the world is opting for battery electric vehicles (BEVs, or “full EV”).

In addition to the geopolitical issues, there is the US response in the latest version of electric vehicle subsidies. In years to come, an electric vehicle battery will have to come from minerals that don’t come from countries the US government has been wary of, especially China, if it wants the vehicle to qualify for tax credits. and discounts. This could lead to more vehicles being plug-in hybrids (PHEVs), but the number of credit-eligible BEVs that can be built will very much depend on battery supplies from friendly nations.

For those who don’t think PHEVs are a good answer in the short to medium term, there’s some good news in a recent press release from Volkswagen. The Volkswagen Group and the Canadian government recently entered into an agreement, known as a “Memorandum of Understanding” (MoU). According to the memorandum of understanding, the two parties will explore options for Canada’s participation in Volkswagen’s international and regional battery supply chains. PowerCo, which is responsible for managing battery value creation, raw material supply chains and cathode material production in North America, among others, has so far played a vital and continuing role. to do so throughout these scheduled procedures.

The German battery maker is working to prepare for the imminent arrival of Tesla. In a separate report, the FinancialTimes said Porsche had entered into talks with Daimler about buying VIA’s electric vehicle (EV) subsidiary. Porsche SE is responsible for all of the group’s global activities across the battery value chain, ensuring cell supply for Volkswagen’s e-mobility push. The booming global battery cell business is one of Volkswagen’s NEW AUTO goals, which aims to make it the global leader in greener, software-driven mobility.

The goal is to quickly establish highly standardized cell production capacities of 240 gigawatts per year in Europe alone. In addition, a specialized gigafactory will be built in North America. Sites are being studied for possible manufacturing locations.

“I am delighted that Volkswagen and Canada have today signed a Memorandum of Understanding on Value Creation for Batteries,” said Olaf Scholz, Chancellor of the Federal Republic of Germany. “This is excellent evidence that cooperation with our close friends and allies in Canada is also deepening in the context of raw material security and could encourage other companies to follow.”

In order to develop more sustainable battery production, the two parties intend to strengthen cooperation based on recognized ESG (Environment, Social, Governance) criteria between PowerCo and the Canadian mining sector. The Canadian mining sector is seen as a world leader in accountability and transparency. To this end, PowerCo plans to establish a new dedicated liaison office in Canada with a particular focus on the supply of critical raw materials such as lithium, nickel and cobalt.

Volkswagen and PowerCo view joint ventures with Canadian suppliers as an excellent way to increase production of cathode materials. With its manageable raw material resources, superior infrastructure, advanced knowledge of the automotive industry and highly skilled workforce, Canada is ready to participate in these projects.

“Canada is rapidly becoming the green supplier of choice for major automotive companies, including major European manufacturers, as we transition to a cleaner, greener future,” said the Honorable François-Philippe Champagne, Minister of Innovation, Science and Industry Canada. “By partnering with Volkswagen, Canada is strengthening its leadership role as a world-class automotive innovation ecosystem for clean transportation solutions. Canada is committed to building a strong and reliable automotive and battery supply chain here in North America to help the world meet global climate goals.

The Volkswagen Group announces its intention to offer 25 battery-electric models by the end of the decade in North America. Additionally, it is expanding its regional capabilities for electric vehicle research and development, vehicle assembly, component production and supply relationships across North America.

“We are committed to bringing electric mobility to consumers and communities in North America. Today’s agreement between Volkswagen Group and the Government of Canada will allow us to work closely with local suppliers and expand our capabilities,” said Pablo Di Si, new President and CEO, Volkswagen. Group of America, Inc. “We continue to invest in electrification with plans to launch more than 25 battery electric vehicles expected by 2030. A large supply of raw materials from across the region will be essential to support our ambitious growth plans.

A step in the right direction for the United States and Europe

It is important to note from the quotes above that battery power is not exclusive to Volkswagen of America. European factories will also rely on battery minerals from Canadian sources. This means that the help the US market will get from this source will be diluted by much (if not most) of the minerals and complete batteries that will be sent to Germany and other VW factories in Europe to build cars. VW.

At the same time, it’s still a big step in the right direction, even for EV buyers in the United States. Any source of battery minerals from a friendly country will supply other countries that don’t want to depend on China for their future and accept the coercive international policies that would come with letting the Communist Party take you by the shorts.

Perhaps more importantly, this is going to do a small part to help democratic countries (and not the odd Orwellian definition of “democracy” we see from CCP/PCC/whatever) be able to build BEVs, build decent PHEVs (with useful EV range) and avoid having to rely on wasteful and inefficient hydrogen technology.

However, there is still much to do. The United States and European countries must do what they can to develop many more geopolitically secure sources for battery minerals.

Featured image courtesy of Volkswagen.


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