Volkswagen Group and PowerCo SE have begun the search for a site to establish the first gigafactory in North America

The Volkswagen Group and its battery company PowerCo SE, established in July 2022, aim to accelerate the development of their battery business worldwide by quickly establishing themselves in North America. Oliver Blume, CEO of Volkswagen, and François-Philippe Champagne, Minister for Innovation, Science and Industry of Canada, yesterday in Wolfsburg signed an amendment to the memorandum of understanding concluded in August to identify sites likely to host a battery cell manufacturing plant in Canada. The two parties are continuing their cooperation, which began in August, in the areas of battery value creation, raw material supply logistics and cathode material production. In addition, PowerCo and materials technology group Umicore have agreed to form a strategic cathode materials supply agreement for North America. In September, the two companies announced that they will work together in Europe to establish a joint venture to ensure the production of cathode materials and precursors.

Oliver Blume, CEO of the Volkswagen Group: “Battery technologies are a strategic pillar for us, which is why we are enthusiastically promoting the deployment of our battery business. Canada is a logical option for building a gigafactory in the North American region. This country really offers a demanding regulatory framework in terms of sustainable development and favorable economic conditions, and the Canadian government has already demonstrated its stability and reliability as a partner. And that’s just the beginning: the electric vehicle market in North America is changing and we’re committed to investing across the region to capitalize on this historic opportunity for Volkswagen and our customers. »

François-Philippe Champagne, Canada’s Minister of Innovation, Science and Industry: “Automobile manufacturing is an important sector for the Canadian economy, supporting hundreds of thousands of families. As the transition to a cleaner, greener future unfolds, the knowledge of Canada’s skilled workforce is essential to help build the green vehicles of tomorrow. Today’s agreement between Canada and Volkswagen is another big step forward, allowing us to continue working together to make Canadian and German transportation cleaner and to meet the demand for zero-emission vehicles in around the world and in America. North. »

The amendment to the memorandum of understanding was signed at the Volkswagen Group Technology global leadership conference held in Wolfsburg under the theme “be more”.

The memorandum of understanding between the Volkswagen Group and Canada was signed in August 2022. To ensure the development of sustainable battery production, both parties intend to rely on recognized Environmental, Social and Governance (ESG) criteria and strengthen cooperation between PowerCo and the Canadian mining sector, which is considered a global pioneer in accountability and transparency.

The amendment to the memorandum of understanding that has just been signed focuses on finding potential sites to set up a gigafactory. Thomas Schmall, Member of the Board of Management of Volkswagen AG in charge of Technology and Chairman of the Supervisory Board of PowerCo SE, explains: “Whenever we invest in the production of environmentally sustainable batteries, we consider not only the characteristics and site infrastructures, but also, and primarily, the availability of renewable energy sources in sufficient quantities and the competitiveness of financial conditions. He added that Canada is among the most likely options for the establishment of a plant in North America, concluding: “PowerCo will in the near future conduct intensive negotiations with all parties concerned to determine the most competitive site. »

A new agreement on cathode materials between PowerCo Umicore

To enable the development of the supply chains necessary for the production of battery cells in North America, PowerCo SE and the Belgian group Umicore, which specializes in materials technology, are strengthening their collaboration to develop regional supply chain for long-term battery materials. . The two partners signed yesterday a memorandum of understanding for a long-term strategic partnership to secure the supply of cathode materials for future battery cell production activities in North America.

A key technological lever for improving battery performance and the main cost factor in their production, accounting for almost 50% of the total cost of a cell, active cathode materials are an important issue for the success of transition to electromobility. In September, the two partners agreed to establish a joint venture that will supply PowerCo’s European unified battery manufacturing plants with their main raw materials from 2025. The goal of the two partners is to produce cathode materials and the their precursors for 160 GWh of cells per year by 2030, i.e. an annual production capable of supplying about 2.2 million fully electric vehicles. The transaction remains subject to approval by the competent authorities and the fulfillment of customary closing conditions.

By signing this complementary strategic supply agreement, the two partners are expanding the scope of their cooperation in Canada. The purpose of this agreement is to provide logistical capabilities at competitive rates and establish a stable supply agreement for cathode materials and precursors to support PowerCo SE’s future battery cell production. The expected volume is 40 GWh per year by 2030, which is equivalent to about 550,000 fully electric vehicles. The first deliveries should start in 2027. To ensure the supply of several partners, Umicore plans to start building a plant in Canada to produce cathode materials and precursors on a large scale from 2023. The plant it will be the first production site of its kind in North America.

Jörg Teichmann, Purchasing Director of PowerCo SE: “This partnership will give PowerCo access to locally produced cathode materials for the production of battery cells in North America. Thus, we at Umicore benefit from a tested and proven partner as well as from high-quality products. »

Ralph Kiessling, EVP Energy & Surface Technologies at Umicore: “By expanding the scope of our partnership across the Atlantic, we are strengthening the strategic beliefs shared by Umicore and PowerCo to enable and accelerate the deployment of clean mobility that with a local logistics base. reliable and durable. By entering into a long-term partnership with PowerCo, Umicore consolidates its project to build the first plant in Canada for the production of precursors and cathode materials. »

PowerCo continues to develop its global battery business

PowerCo SE is a major player in developing battery value creation activities in North America. Placed under the direction of Frank Blome, its CEO, the company brings together all the Group’s activities in the field of batteries and aims to secure the supply of battery cells to enable Volkswagen to -deploy its electromobility offensive. The battery cell production business, which is growing rapidly worldwide, is a key pillar of Volkswagen’s NEW AUTO strategy which aims to make the Group a world leader in providers of sustainable mobility solutions with software. . Together with its partners, PowerCo SE deploys highly standardized battery cell production capabilities worldwide to meet the growing demand for cells that enable sustainable battery-based electromobility.

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