The Volkswagen Group and Mercedes-Benz have announced new partnerships with Canadian Prime Minister Justin Trudeau’s government that will work to support the EV supply chain in North America. While both were signed as Memorandum of Understanding (MoU) agreements, the scope of each partnership varies – with Volkswagen focusing on the battery supply chain, and Mercedes-Benz exploring a broader cooperation across the full EV value chain.
With the Government of Canada, Volkswagen aims to promote electric mobility within the country while exploring opportunities across its automotive and battery supply chain. Likewise, they will together investigate how Canada can contribute to the OEM’s own global and regional battery supply chains. The Group’s recently-formed battery subsidiary, PowerCo, will play a major role in the execution of the agreement – enabling its efforts within battery value creation and raw material supply chains, as well as cathode material production in North America. Since its July 2022 launch, PowerCo has aided the Group’s battery value chain activities – helping secure the battery supply needed to support its e-mobility push.
Another key element of Volkswagen’s agreement involves a collaboration between PowerCo and Canada’s mining sector. This collaboration will focus on the supply of raw materials such as lithium, nickel, and cobalt, and see PowerCo establish a liaison office in Canada. Through it, the Canadian government and Volkswagen Group will offer local suppliers the opportunity to act as suppliers, refiners, and processers of raw material. The Group expects to announce its potential mining and refining partners before the end of the year.
The MoU agreement between Mercedes-Benz and Trudeau’s government works to achieve a similar purpose to Volkswagen’s, though at a wider scale – promoting co-operation and exploring opportunities to advance Canada’s EV supply chain. All stages of this chain are accounted for within this agreement – from technical development and raw material sourcing through to production, service life, and recycling. In fulfilling the agreement, Mercedes-Benz is exploring a strategic partnership with Rock Tech Lithium that would supply it and its battery partners with lithium hydroxide. Rock Tech itself has said that, from 2026, it intends to deliver up to 10,000 tons of the raw material to the OEM and its partners annually. Ultimately through this partnership, Mercedes-Benz hopes to accelerate its electrification strategy while satisfying EV battery demand at large.