Company logo flags wave in front of a Volkswagen factory building in Zwickau, Germany, April 23, 2020. Volkswagen AG says it has started searching in Canada for the site of its first battery factory in North America. THE CANADIAN PRESS/AP-Jens Meyer

Volkswagen searching in Canada for first North American battery factory site

Volkswagen AG has started searching in Canada for the site of its first battery factory in North America.

The automotive giant said its chief executive Oliver Blume has signed an agreement with Industry Minister François-Philippe Champagne to work to identify suitable sites.

The agreement comes as an addition to an August memorandum of understanding between the two that committed to investigate opportunities for Canada to contribute to VW’s battery supply chains, including in raw materials and battery assembly.

“Today is the beginning of a long-term strategic partnership,” Champagne said in an interview from Germany after he pitched Canada’s case to 400 Volkswagen managers.

The North American electric vehicle market is at a turning point, said Blume, and the company is committed to investing across the region to leverage this historic opportunity.

The company said that as part of its site search it is looking not only for suitable land and infrastructure, but also adequate supplies of renewable energy and competitive financial conditions.

Champagne said while a site hasn’t been announced yet, Volkswagen would not have made public statements about searching for one if they didn’t intend to follow through and actually build a battery factory.

“It’s a big statement,” said Champagne.

He wouldn’t disclose exactly where Volkswagen is looking but said it will be near where there are skilled workers, access to renewable energy and with proximity to critical minerals that will be used in the batteries.

That makes Ontario and Quebec the likely leading contenders.

Champagne will make the same kind of pitch to the board of Mercedes-Benz next week.

Canada has seen at least 10 major electric vehicle-related commitments totalling close to $16 billion since the start of 2021 as federal and provincial governments work to secure investments in the rapidly-evolving sector.

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