New memorandums of understanding aim to promote EV adoption and address supply chain issues
On August 23, the Government of Canada, along with Mercedes-Benz and Volkswagen, announced a memorandum of understanding centred around electric vehicles and battery manufacturing. The Honourable François-Philippe Champagne, Federal Minister for Innovation, Science and Industry announced this agreement between the government and the two major automotive OEMs.
Although the overall aim is to look for sustainable strategies in the raw material sourcing, manufacturing, and distribution of future automobiles and to create a so-called “sustainable transportation” model, each memorandum of understanding contains some specific initiatives.
Enhanced collaboration
The agreement between the Government of Canada and Mercedes-Benz emphasizes enhanced collaboration with Canadian companies within both the electric vehicle and battery supply chains—with the aim of supporting sustainable critical mineral supply chains, right here in Canada. These supply chains, according to the GoC announcement, will be based on Environmental and Social Governance principles, while at the same time, identifying potential investment and collaboration opportunities in Canada.
Volkswagen’s Memorandum of Understanding with the Government of Canada focuses on deeper collaboration regarding sustainable battery manufacturing, cathode active material production, and critical mineral supply, as well as setting up a Canadian office of operations for PowerCo, Volkswagen’s in-house battery company.
Although the August 23 announcements didn’t dive into many specifics, the aim is to try and move forward with an effective, long-term collaboration plan to help Canada achieve significant reductions in vehicle emissions—to meet current targets outlined by the Federal Liberal Government, including 100% Zero emissions vehicle sales by 2035 and a Net-Zero economy by 2050. The Memorandum of Understanding between the Federal government and both OEMs also aims to address current global mining and supply chain issues related to battery and microchip manufacturing by forging more local supply networks to improve resource security and manufacturing efficiency.
“By partnering with Mercedes-Benz and Volkswagen, Canada is strengthening its leadership role as a world-class automotive innovation ecosystem for clean transportation solutions,” stated Federal Minister of Innovation, Science and Industry, The Honourable François-Philippe Champagne.
Resilience and sustainability
Markus Schäfer, Member of the Board of Management of Mercedes-Benz Group AG and Chief Technology Officer, responsible for Development and Procurement, added that in order “to scale up our electric vehicle production, direct access to primary sources of raw materials is needed to improve the resilience and sustainability of the electric vehicle supply chain.” Schäfer also stated that thanks [to our memorandum of understanding with Canada] “Mercedes-Benz has a strong and capable partner to break new ground for a new era of sustainable transformation in the automotive industry.”
From Volkswagen AG, CEO Dr. Herbert Diess said “working hand in hand with governments around the world is an absolute prerequisite to meeting our climate goals and I want to thank the Canadian government for its support. The supply of battery raw materials and the production of precursor and cathode materials with a low carbon footprint will allow for a fast and sustainable ramp-up of battery—a key lever for our growth strategy in North America.”
