VW and Mercedes look to Canada for North American EV battery supply chain

Mercedes-Benz and Volkswagen need to Canada for provides of battery uncooked supplies, which ought to assist the automakers meet new eligibility necessities for the USA EV tax credit score.

The just lately handed Inflation Discount Act (IRA) lays out stipulations on essential minerals, battery sourcing, domestic-content thresholds, and automobile meeting that ratchet up beginning in 2024. Which means EVs will want a higher quantity of American-made content material—for many provisions, from U.S., Canada, and Mexico—to qualify for the $7,500 EV tax credit score.

VW is because of begin delivering U.S.-built ID.4 EVs quickly, whereas Mercedes plans to construct its EQE SUV and EQS SUV in Alabama beginning later this yr. However this week the 2 automakers additionally introduced offers that ought to transfer extra of the battery provide chain to North America, doubtlessly satisfying IRA stipulations.

2023 Mercedes-Benz EQS SUV

VW on Tuesday signed a memorandum of understanding (MoU) with the Canadian authorities to “examine alternatives for Canada to contribute to Volkswagen’s international and regional battery provide chains,” the automaker mentioned in a press launch, including that its PowerCo battery division will set up a devoted liaison workplace in Canada.

“A key focus of cooperation is the availability of essential uncooked supplies similar to lithium, nickel and cobalt,” the discharge mentioned.

Mercedes introduced its personal MoU with the Canadian authorities the identical day as VW, specializing in mining and refinement of uncooked supplies in addition to cell manufacturing, the automaker mentioned in a press launch.

Volkswagen ID.4 built at Chattanooga

Volkswagen ID.4 constructed at Chattanooga

“The aim of the MoU is to advertise cooperation and to discover methods to advance alternatives throughout Canada’s electrical automobile provide chain, together with, however not restricted to securing sustainable sources of uncooked supplies,” the discharge mentioned.

Mercedes mentioned it was additionally poised to signal an settlement with Canadian-German agency Rock Tech Lithium for an annual provide of as much as 10,000 metric tons (11,023 U.S. tons) of lithium hydroxide for batteries starting in 2026.

These bulletins come slightly below a month after Normal Motors introduced a serious battery-material provide settlement, which the automaker mentioned will present it with sufficient uncooked supplies for 1 million EVs yearly by 2025. Ford mentioned final month that it will considerably increase EV manufacturing to fulfill demand, relying partly on localized manufacturing of lithium iron phosphate (LFP) battery cells for particular markets.

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