Canada has agreed to offer up to C$13bn in subsidies and a C$700mln grant to attract Volkswagen Group (XETRA:VOW) to build its North American battery plant in the country, according to a government source.
The Canadian investment, which could also involve funds from the Ontario government, is expected to largely match what Volkswagen would have received from the US through the Inflation Reduction Act.
The plant, estimated to cost about C$7bn to build, will have a maximum capacity of 90 gigawatt-hours, enough to supply batteries for over a million cars annually. Volkswagen is set to announce further details of the project on Friday during a meeting with Canadian Prime Minister Justin Trudeau in Ontario.
Volkswagen aims for its battery unit PowerCo to become a global battery supplier and meet half of its own demand with plants primarily in Europe and North America.