Volkswagen, Mercedes Benz Struck a Deal with Canada To Avoid Tariff Difficulties for EV Battery Supplies

Volkswagen AG and Mercedes-Benz Group AG have reached an agreement with Canada to reduce pricing and tax regulation issues and shorten supply lines to its factories in the United States, as reported by Bloomberg.

WUHAN, CHINA – JULY 14: (CHINA OUT) Attendees look around the Volkswagen ID.3 at the 2022 Central China International Auto Show on July 14, 2022 in Wuhan, Hubei province, China. More than 80 brands participated in the 2022 Central China International Auto Show which kicked off on Thursday. According to local reports, more than 30 power plants participated in the exhibition.
The agreement allows the two companies to secure their access to raw materials such as cobalt, nickel and lithium for the production of electric batteries (EV). Germany and Canada plan to work together in areas such as tourism.

VW and its plans
VW’s stock is also boosted by US President Joe Biden’s new laws that were signed into law last week. The Biden administration’s Cut Inflation Act allows consumers to receive $7,500 in electric vehicle tax credits if manufacturers meet the new requirements. The minerals must come from or be processed in countries that have concluded a free trade agreement with the United States.

VW and its battery business PowerCo are working to speed up their battery operations. In addition, Mercedes and Stellantis NV also have a mission to manufacture batteries.

VW plans to build six factories in Europe, while Mercedes has partnered with Stellantis in a €7 billion venture and is suing eight factories around the world.

The Canadian government will hold a press conference with VW “to announce an agreement to integrate the use of electricity in the country,” as Collision Repair Mag reported.

The aim of these automakers is to fill the shortage of batteries by adding suppliers to its own production. VW is also looking for locations for a US battery plant that supplies kits to its Chattanooga auto plant.

Also read: Volkswagen unveils the “Flying Tiger” – a fully electric aircraft with a range of up to 200 km!

Mercedez Benz AG continues to expand
Recently, Mercedes Benz announced the expansion of its supply partnership with CATL, a Chinese company. The two companies have been working together since 2020, and the automaker will be the first partner to receive battery cells from the upcoming plant in Hungary with “a significant first order,” as InsideEVs reported.

In July 2021, Mercedes-Benz announced that it wanted to go all-electric by 2030. With the high demand for batteries, it should be supplied by eight lithium-ion factories locally, which means 25 GWh in the factory on average.

On the other hand, CATL’s initiative in Hungary aims to supply battery cells for the next Mercedez-Benz models.

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