The federal government has signed separate agreements with Volkswagen and Mercedes-Benz that will give the two German auto makers secure access to Canadian raw materials for electric vehicle batteries.
Prime Minister Justin Trudeau and German Chancellor Olaf Scholz witnessed the signing ceremony at an event hosted by the Canadian-German Chamber of Industry and Commerce in Toronto.
According to a senior government official, the two agreements will involve securing Canada’s place in both companies’ supply chains when it comes to making electric vehicles.
This includes the provision of Canadian cobalt, graphite, nickel and lithium needed for EV batteries, said the official, who spoke on condition of anonymity because the contract has not yet been signed.
Scholz hinted at pending discussions between Canadian and German auto makers during a news conference with Trudeau in Montreal on Monday.
“I am pleased to see that many announcements have been made during our visit and the signing between the companies, Volkswagen and Mercedes is an example,” he said in German.
The agreements come a week after US President Joe Biden signed a plan to provide tax credits for electric vehicles manufactured not only in the United States, but also in North America.
They also follow a series of investments made by other electric-vehicle manufacturers in the Canadian automotive industry.
More than $13 billion was pledged in just eight weeks last spring to build the necessary battery supply chain and shift production from combustion-engine to plug-in vehicles.
That was on top of another $3.5 billion committed over the past four years, including construction of electric school and transit buses, production and processing of key minerals needed to make batteries, and research and development facilities.
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