Volkswagen lines up tariff-friendly battery supply deal with Canada
BNN Bloomberg
Volkswagen AG has sealed an agreement with Canada to secure access to raw materials such as nickel, cobalt and lithium for vehicle and battery production, according to people familiar with the accord.
The memorandum of understanding will be signed during German Chancellor Olaf Scholz’s current trip to Canada and is designed to shorten supply chains for VW’s facilities in the US and avoid difficulties linked to tariffs and tax regulations, said one of the people, who asked not to be identified discussing confidential information. The move has partly been prompted by new rules that US President Joe Biden signed into law last week, the person added.
Spokespeople for VW did not immediately respond to a request for comment when contacted by Bloomberg.
The Biden administration’s Inflation Reduction Act allows consumers to continue getting as much as US$7,500 in tax credits for electric vehicles if manufacturers meet new content requirements. Minerals must be extracted from or processed in countries the US has a free trade agreement with, and a large percentage of battery components need to be manufactured or assembled in North America.
