Battery cell production in a Volkswagen pilot line in Salzgitter

Volkswagen Group and its battery subsidiary PowerCo SE are considering Canada for a new battery cell factory, Reuters reported

Canada was "a logical option," a source told Reuters Thursday. It would be VW's first gigafactory outside of Europe and expands on an agreement the German carmaker signed with Canada signed earlier to explore access to raw materials such as cobalt, lithium and nickel.

VW was part of a German delegation of politicians and companies that signed the agreement in August to become shareholders in local mining firms to have the first choice regarding supply.

VW has continued investing in and researching sustainable technologies to achieve its goal of creating a fleet of electric vehicles. That goal depends on a consistent supply of batteries

"PowerCo is about to jump across the Atlantic. The framework conditions in North America are highly attractive. The most competitive location wins the race," explained Volkswagen technology board member Thomas Schmall.

VW signed a $2.9 billion battery parts joint venture with European materials firm Umicore on Sept. 26 in order to secure more battery supplies. While the materials needed for production will be sourced globally, European battery production will most likely be at Umicore's Poland plant.

Along with a dedicated factory in North America, VW is planning to build six battery cell factories in Europe by 2030.