Canada’s government partners with Volkswagen and Mercedes to secure battery and critical mineral supply chains

30 August 2022 | Muriel Cozier

Canada’s government moves to meet its 2035 target for 100% zero-emissions vehicle sales.

Canada’s government has struck deals with German car manufacturers Volkswagen AG and Mercedes-Benz AG centred on sustainable battery manufacturing and meeting demand for electric vehicles. The government said that the move marked the establishment of ‘historic partnerships.’

The Memorandum of Understanding signed with Volkswagen focuses on cooperation in the area of sustainable battery manufacturing, cathode active materials production, and critical mineral supply. There is also a plan to set up a Canadian office for Volkswagen’s newly formed battery company, PowerCo.

SCI News - 30 August 2022 - image of Canadian and German representatives signing document
Volkswagen CEO Diess and Canadian minister Champagne (foreground), German Federal Chancellor Scholz and Canadian Prime Minister Trudeau.

The Mercedes-Benz agreement aims to enhance collaboration with Canadian companies along the electric vehicle and battery supply chains; support development of a sustainable critical mineral supply chain, which the government says is based on environmental, social and governance principles, alongside collaboration in research and development.

There are also plans to identify potential investments in Canada. The car manufacturer is also exploring a strategic partnership with Canadian company Rock Tech Lithium Inc, which could see from 2026 onwards, Rock Tech supplying Mercedes-Benz and its battery partners with up to 10,000 tonnes of lithium hydroxide each year.

Canada’s government has set a target of achieving 100% zero-emission vehicle sales by 2035, supporting its commitment to reach net zero emissions by 2050. The government also used its 2022 budget to set out proposals for investing CAN$3.8 billion to support development and implementation of the county’s first Critical Minerals Strategy. Strategies for critical minerals are being developed by the US and UK governments.

Canada’s Minister of Innovation, Science and Industry, The Honourable François-Philippe Champagne said: ‘By partnering with Volkswagen and Mercedes, 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.’

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