The race to construct a home electric-vehicle provide chain has revved up with Volkswagen Group’s resolution to single out Canada as a potential website for its first North American battery plant.
“Canada is one logical choice for the development of a gigafactory within the area of North America,” VW CEO Oliver Blume mentioned in an announcement Dec. 1. “The nation provides excessive sustainability requirements and excellent financial situations, and the federal government of Canada has already confirmed to be a robust and dependable associate.”
The announcement got here as an addendum to a memorandum of understanding (MOU) that VW and Canada signed in August. In it, the 2 events agreed to cooperate on constructing a “sustainable” provide chain for battery-electric automobiles. It adopted conferences in Wolfsburg, Germany, between Volkswagen executives and federal Business Minister François-Philippe Champagne, who was on a weeklong European tour selling Canada’s auto business.
The location search in Canada is being carried out by VW’s battery unit, PowerCo SE, which has been tasked with establishing the automaker’s international EV provide chain.
Whereas the settlement included no funding commitments, VW didn’t publicly point out different international locations for the possible funding, and business proponents insist it’s critical about establishing a Canadian manufacturing footprint.
“This actually appears like it’s past the final curiosity/due-diligence stage,” mentioned Brendan Sweeney managing director of the Trillium Community for Superior Manufacturing, which promotes Ontario’s manufacturing sector. “There are not any ensures, after all, however a number of room for optimism.”
LOOKS GOOD FOR CANADA
That sentiment was echoed by Champagne throughout a media convention name on Dec. 5.
“Germans being Germans, I don’t suppose they’d invite the minister of business of Canada, with 400 of their high managers, and say, ‘Let’s get shifting, we want scale, we want pace and let’s get going,’ in the event that they weren’t critical in regards to the challenge.
“Clearly, it’s a must to get to the ultimate spherical, [but] … I’ve by no means seen a CEO of an organization that measurement say that [Canada is the logical choice] in public. … It appears excellent for Canada,” Champagne mentioned.
VW seeks “environmentally sustainable battery manufacturing,” Thomas Schmall, chairman of PowerCo’s supervisory board, mentioned in a launch. The corporate will think about not solely “website traits and infrastructure but additionally, and particularly, the supply of ample portions of power from renewable sources and aggressive monetary situations,” Schmall mentioned.
On the Los Angeles Auto Present in November, Pablo Di Si, CEO of Volkswagen Group of America, highlighted the federal authorities’s inexperienced industrial insurance policies.
“What I heard from the Canadians, I favored it, as a result of they had been environmentally accountable,” mentioned Di Si, who attended the August MOU signing ceremony. “They mentioned: ‘Hear, extracting the minerals is the straightforward half. We have to put a inexperienced seal that everyone can audit. All people can see that it’s environmentally pleasant.’”
LOGICAL LOCATIONS
Ontario and Quebec have principally clear hydro-electric energy era with vital capability. If Canada wins the plant, it is going to possible be someplace between London, Ont., and the western Larger Toronto Space, mentioned Sweeney.
“We all know of two giant parcels of land accessible for industrial growth — one in St. Thomas and one in Hamilton,” he mentioned. “This a part of the province additionally has the transportation infrastructure and work power needed for such a big funding. Additionally it is shut sufficient to the VW plant in Tennessee.”
Final 12 months, the automaker’s Chattanooga facility constructed 112,123 of the 544,031 automobiles the automaker produced in North America, based on the Automotive Information Analysis & Knowledge Heart. The plant assembles the Altas and Atlas Cross Sport giant crossovers and the ID.4 EV compact crossover.
In a Dec. 13 tweet, Ontario Business Minister Vic Fedeli mentioned he and Premier Doug Ford had their third assembly since April with Volkswagen and PowerCo executives. They mentioned “how Ontario is reducing the price of doing enterprise by $7 billion yearly,” Fedeli mentioned.
Quebec, which has loved a flurry of EV supply-chain investments this 12 months, additionally provides “a aggressive proposition,” mentioned Flavio Volpe, president of the Automotive Components Producers’ Affiliation.
If VW chooses to course of vital battery minerals in Canada, “it’s in all probability higher to try this in Quebec given the associated fee and supply {of electrical} energy,” he mentioned.
Volpe expects VW to announce a call on the successful website through the first half of 2023.
Sweeney mentioned the plant would possible be about half the scale of the $5-billion battery-cell plant slated for Windsor, Ont. That three way partnership between Stellantis and LG Power Answer is predicted to make use of not less than 2,500 individuals and have the capability to provide 450,000 100 kilowatt-hour packs per 12 months.
“Primarily based on VW’s U.S. manufacturing, we’d anticipate this to be smaller than the LG-Stellantis plant in Windsor… though it might nonetheless be a major funding,” Sweeney mentioned. It might generate “not less than 1,000 jobs, in all probability extra, and lots of of those jobs could be in engineering/technical fields.”
JOB POSTINGS IN PLACE
In the meantime, Volkswagen has begun recruiting workers who will employees PowerCo’s Canadian workplace, mentioned firm spokesman Thomas Tetzlaff. Job postings embrace a supervisor of raw-material buying, tasked with negotiating provide contracts with mining corporations in Canada.
VW’s announcement of a website search in North America additionally included a dedication to increase its partnership with the Belgium-based battery-materials provider Umicore NV. In September, the 2 corporations fashioned a three way partnership in Europe to provide cathode energetic materials (CAM), a key ingredient in battery cells. They plan to collectively make investments three million euros to provide CAM for two.2 million VW automobiles in Europe yearly by 2030.
The collaboration is poised to cross the Atlantic as VW pursues cell manufacturing in North America. On Dec. 1, the businesses signed an preliminary, nonbinding deal to work towards a agency provide settlement for CAM for as much as 550,000 North American automobiles yearly by 2030.
In July, Umicore introduced plans to construct a $1.5-billion built-in manufacturing plant for cathode and precursor battery supplies close to Kingston, Ont.