As Electric vehicles (EVs) become more popular, the demand for batteries is increasing, with the market set to expand significantly over the next decade. To meet this demand, Volkswagen is investing in mining projects in Canada, which is the first of its many planned investments in battery cell production.
The company has already established a battery unit, PowerCo, which is targeting over €20bn in annual sales by 2030. To reach this goal, PowerCo plans to build battery plants in Europe and North America, as well as secure its raw material supply until 2026. The first North American battery plant, located in St. Thomas, Ontario, is set to begin production in 2027.
In order to reduce the cost of battery cells and meet its own demand, Volkswagen has partnered with mining companies in Canada. Thomas Schmall, the board member in charge of technology at Volkswagen, explained that this direct investment in mines can cut years off mine development times for junior miners.
The company has allocated up to €15bn in its €180bn five-year spending plan for its three announced battery plants and some raw material sourcing. Volkswagen is using all instruments at its disposal with PowerCo to reduce battery costs further and meet its own demand.
The company is also developing a new affordable Electric Car, the ID. 2all, which is expected to cost less than €25,000. This will make EVs more accessible to a wider range of consumers, increasing demand for battery cells even further.
Volkswagen’s investments in mining projects in Canada is an important step towards reducing the cost of battery cells, meeting its own demand, and selling to third-party customers. This is a significant development in the EV industry and will help drive the market forward in the years to come.