Shulou(Shulou.com)11/24 Report--

CTOnews.com, March 13 (Reuters)-Volkswagen announced on Monday that it would build its first battery unit factory in North America in Canada, allowing its cars to receive subsidies from the U.S. Government that require batteries for electric vehicles to be made of North American materials.

According to the inflation reduction Act (IRA) of the United States, cars can receive thousands of dollars in subsidies only if a certain proportion of the key minerals in the battery are mined or processed in the United States or countries with free trade agreements with the United States, or recycled in North America.

Volkswagen confirmed in December that it was looking for sites to build factories in Canada to ensure access to key raw materials for batteries, six months after signing a memorandum of understanding with the Canadian government.

"We are rapidly advancing the implementation of our North American strategy through the decision to produce battery units in Canada and to build a Scout-branded plant in South Carolina." Volkswagen CEO Oliver Blume said in a statement Monday.

The carmaker said last week that its Scout brand would build a $2 billion manufacturing plant near Columbia, South Carolina, to make trucks and SUV, and plans to start production in 2026.

Volkswagen has long said it is working to establish regional supply chains in Europe, North America and China for electric car production, given high transport and logistics costs, supply chain risks and geopolitical tensions. The company said last week that IRA had given priority to its decision to invest in North America, adding that plans for battery plants in Europe were still under way, but that it would be waiting to see if IRA would stimulate Europe to provide better incentives.

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