Volkswagen Group and Mercedes-Benz Group have signed Memorandums of Understanding (MoU) with the Canadian government to secure access to the country’s reserves of battery materials such as lithium, cobalt, nickel and graphite.
While German automakers are competing for scarce supplies of raw materials with other carmakers shifting to electric vehicles, their motivation for a deal with Canada goes beyond that. It likely has a lot to do with America’s recently passed Inflation Reduction Act, which stipulates that EVs eligible for the full $7,500 federal tax credit will need to be made in North America and feature battery materials sourced from North America.
Starting in 2024, at least 40% of the critical minerals in EV batteries must be sourced from North America or other free-trade partners, with the requirement going to 100% by 2029.
In the presence of Canadian Prime Minister Justin Trudeau and German Chancellor Olaf Scholz, the memorandums of understanding were …