Quebec appears out of running for Volkswagen battery cell plant

Quebec appears to be out of the running for Volkswagen Group’s planned North American battery cell manufacturing plant, according to Pierre Fitzgibbon, the province’s minister of economy, innovation and energy.

The German automaker and Quebec government have a running dialogue on other future possibilities, Fitzgibbon told Automotive News Canada, but Volkswagen’s initial battery cell plant “is not on our radar right now.”

Volkswagen announced it was scouting locations for the major North American investment Dec. 1, singling out Canada as “one logical option” for the plant that will build battery cells for the automaker’s North American-made electric vehicles.

The company did not disclose where in the country it was looking, but Ontario, with its automotive roots and fast-coalescing battery supply chain, as well as Quebec, which is soon to be home to a series of battery materials plants and Canada’s only operational lithium mine, were seen as contenders.

Canada was the sole country Volkswagen publicly disclosed in December as being on the shortlist for its planned North American cell plant, but it said “other options” were also being considered.

Volkswagen Group Canada spokesman Thomas Tetzlaff would not comment on the state of the company’s cell plant site search, or provide a timeline for when an announcement would be made.

But Canada remains in the race.

Laurie Bouchard, a spokeswoman for the federal department of innovation, science and economic development, confirmed Ottawa is still in discussions with Volkswagen. She would not elaborate further.

All signs point to Canada’s most populous province.

Vic Fedeli, Ontario minister of economic development, job creation and trade, has been unwilling to discuss the province’s talks with Volkswagen, but a December tweet, since deleted, shows he and Premier Doug Ford met with officials from the automaker and its battery subsidiary PowerCo SE as recently as last month.

Documents filed between Jan. 4 and Jan. 13 with the Ontario Office of the Integrity Commissioner, which oversees lobbying in the province, say internal Volkswagen personnel and its consultants have met with a range of ministries, as well as the Independent Electricity System Operator, which manages the province’s power grid.

Internal Volkswagen or PowerCo staff recently registered as lobbyists in Ontario include those with roles in location scouting, human resources, and civil and facility engineering.

Ontario’s ministry of economic development, job creation and trade would not comment on the talks.

Volkswagen is expected to announce a decision relatively soon. Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, told Automotive News Canada in December he expects the company to announce the location of its first North American battery cell plant in the first six months of 2023.

Quebec, meantime, is not abandoning its pursuit of other cell manufacturers. Currently, Fitzgibbon said, the province has two prospective plants in its pipeline.

“They may not be signed short-term, but I’m confident that we will at one point get one.”

Fitzgibbon said as the initial wave of battery plants rolled out across North America, Quebec’s distance from the United States’ automotive heartland likely served as a deterrent.

“The first cohort of cell plants have been announced close to the OEMs. It’s a natural reflex.”

But as automakers require more and more battery cells, he expects the integrated web of battery materials plants coming together in Quebec, and the province’s clean, low-cost power will draw automakers northeast.

“As we solidify the production of cathodes [and] anodes … this is 50 per cent of the value of a battery pack. So, we are at the right place to get that foundation built.”

Bécancour, Que., which sits on the south shore of the St. Lawrence River, midway between Montreal and Quebec City, is poised to become home to a series of battery materials plants.

Lithium, nickel and cobalt processors are weighing investments, while Nouveau Monde Graphite Inc., has already begun construction on a plant in the city.

Two cathode active materials (CAM) plants are also in the works. In March 2022, General Motors and Posco Chemical announced plans for a $500 million CAM plant in the city. German chemical company BASF purchased land in Bécancour for its own plant the same month.

Fitzgibbon said the province is “working hard” to confirm yet another CAM manufacturer for Quebec.

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