Canada strikes historic partnerships with leading German automakers Volkswagen and Mercedes

Canada German Agreement Mercedes Volkswagen

August 23, 2022 – Toronto, Ontario, Canada

Today, the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry of Canada, announced historic partnerships with two leading German automakers in the form of memoranda of understanding with Volkswagen AG and Mercedes-Benz AG. Canada’s automotive future is founded on maximizing the benefits of our natural resources and adding value to global supply chains for electric vehicles and batteries. These agreements will further collaboration with two innovative global players across a range of sectors, help secure Canada’s position as a leading centre of excellence for the manufacturing of electric vehicles and batteries and help ensure that Canada is a destination for investments in this space.

The Volkswagen agreement focuses on deepening cooperation on sustainable battery manufacturing, cathode active material production and critical mineral supply, among others, and on setting up a Canadian office for PowerCo, Volkswagen’s newly formed battery company.

The Mercedes-Benz agreement focuses on enhancing collaboration with Canadian companies along the electric vehicle and battery supply chains; supporting the development of a sustainable critical mineral supply chain in Canada that is based on environmental, social and governance principles; collaborating in research and development; and identifying potential investments in Canada.

The recent visit by Minister Champagne to Germany in May was the catalyst for these agreements. During his trip, he met with key business and industry leaders to strongly communicate Canada’s automotive value proposition and reiterate our credentials as a sustainable and reliable partner.

Since January, Canada has secured historic manufacturing deals for electric vehicles, batteries and hybrids— deals that create and secure thousands of good, middle-class jobs while positioning Canada as a leader in the electric vehicle and battery manufacturing space.

Today’s announcement represents another major step forward, as Canada continues the work to grow its clean transportation sector and meet global and North American demand for zero-emission vehicles.

Quotes

“Canada is quickly becoming the green supplier of choice for major auto companies, including leading European manufacturers, as we transition to a cleaner, greener future. 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.”
– The Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry

“Volkswagen has been vigorously pushing the transformation to e-mobility, recognizing the industry‘s responsibility in the global battle against climate change. The Group today not only offers the broadest range of electric models to customers but also is rolling out an ambitious battery and charging strategy. Working hand in hand with governments around the world is an absolute prerequisite to meet our climate goals, and I want to thank the Canadian government for its support. The supply of battery raw materials and the production of precursor and cathode materials with a low carbon footprint will allow for a fast and sustainable ramp-up of battery capacity—a key lever for our growth strategy in North America.“
– Dr. Herbert Diess, CEO of Volkswagen Group

“Mercedes-Benz plans to go all electric by the end of this decade, wherever market conditions allow. To scale up our electric vehicle production, direct access to primary sources of raw materials is needed to improve the resilience and sustainability of the electric vehicle supply chain. Thanks to our memorandum of understanding with Canada, Mercedes-Benz has a strong and capable partner to break new ground for a new era of sustainable transformation in the automotive industry.”
– Markus Schäfer, Member of the Board of Management of Mercedes-Benz Group AG and Chief Technology Officer, responsible for Development and Procurement

Quick facts

  • Canada is a stable, secure and reliable partner for companies looking to grow their business operations in North America.
  • Canada is a top destination for European investors, with recent investments in the battery supply chain by companies like Germany’s BASF and Belgium’s Umicore, demonstrating the strong and growing potential for collaboration in the clean technology and automotive space.
  • Canada’s auto sector supports nearly 500,000 workers, contributes $16 billion annually to Canada’s gross domestic product, and is one of the country’s largest export industries.
  • Earlier this year, the federal government released the 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean Air and a Strong Economy, an ambitious and achievable sector-by-sector approach for Canada to reach its new climate target of cutting emissions by at least 40% below 2005 levels by 2030 and to put us on track toward our goal of achieving net-zero emissions by 2050.
  • The Government of Canada has set a target of achieving 100% zero-emission vehicle (ZEV) sales by 2035. Accelerating the ZEV target will support Canada’s commitment to reach net-zero emissions by 2050 and its pledge at the United Nations 2019 Climate Action Summit.
  • Budget 2022 provided $1.7 billion to extend the Incentives for Zero-Emission Vehicles program and broadened eligibility under the program to include more vehicle models. It also provided $900 million to help add 50,000 zero-emission vehicle chargers to Canada’s network.
  • Budget 2022 also proposes $3.8 billion in support to develop and implement Canada’s first-ever Critical Minerals Strategy.

Press release: Link

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