Volkswagen Group (XETRA:VOW) and Mercedes-Benz Group agreed a deal with Canada to secure supplies of nickel, cobalt, and lithium used in battery production.
According to reports, a memorandum of understanding will be signed in Toronto on Tuesday by German Chancellor Olaf Scholz and Canadian Prime Minister Justin Trudeau.
A Volkswagen board member told the Handelsblatt daily the company wants to enter the mining business in Canada to ensure raw material supply.
"We are not opening any mines of our own, but we want to acquire stakes in Canadian mines and mine operators," Thomas Schmall said, adding Canada has virtually all the raw materials required to produce batteries.
A Volkswagen spokesperson told Bloomberg that along with its battery division, PowerCo, the carmaker is working on increasing its battery activities, especially reliable and sustainable supply chains,
"This holds true for the very promising North American market as well," the spokesperson said.
VW's agreement aims to shorten its supply chains in the US and benefit from tax incentives.
Volkswagen, Mercedes, and Stellantis NV (NYSE:STLA, EPA:STLA) (Stellantis NV (NYSE:STLA, EPA:STLA), Stellantis NV (NYSE:STLA, EPA:STLA)) all have ambitious plans to manufacture batteries, with VW hosting six factories in Europe alone, and Mercedes planning eight factories worldwide with a US$7bn battery venture partnership with Stellantis.
In North America, VW is also considering setting up its own battery-cell manufacturing operations.