Expect more Canadian investment from Volkswagen. 

In an interview with The Logic, Volkswagen Canada CEO Pierre Boutin said we “will most likely see things happening by Christmas or by the end of the year. … And we would very much like to see some of these announcements … happening right here in Canada.” 

Boutin’s remarks come on the heels of an agreement with the Canadian government announced last month, which included a pledge to “investigate opportunities for Canada to contribute to Volkswagen’s global and regional battery supply chains.” Boutin said that, as Volkwagen expands its manufacturing footprint in North America, Canada has a “fantastic opportunity” to do further business with the German automaker. 

While there are “many factors” facing the decision-makers in Wolfsburg, last month’s agreement is “a major step forward for us in terms of the consideration of Canada.”

Why it matters: A Volkswagen gigafactory, cathode-material plant or assembly plant would be a big win for Canada, as Volkswagen ascends to the world’s top automaker in 2022. It’s a top-selling brand across Europe and China, but North America is the “third leg to the table” where it really needs to grow, said Boutin. That means maxing out its manufacturing in Tennessee and Mexico, but also looking for new sites where it can manufacture without adding to its carbon footprint. 

“At this stage, I want to insist on this: Why Canada is so attractive is the question of renewable sources of energy,” said Boutin, also noting the importance of clean mining and a well-established group of auto suppliers.

The decision of where to put plants, he said, will not be a matter of government subsidies.

“Yes, Canada needs to be competitive, obviously, because we have different choices around the world. But there’s certain things that you cannot buy with money,” he said. “The fact that cobalt, for instance, in North America, Canada pretty much has the exclusivity on it; the sustainable supply- chain potential that we see here. and the overall CO2 impact.” 

The backdrop: Ontario’s government has come under pressure for cancelling renewable-energy projects, unnerving LG Chem, which had planned to expand its supply chain for its forthcoming battery plant.

Still, provincial and federal officials have been courting automakers and battery companies, including a federal innovation ministry visit to Germany. Boutin said officials have been “extremely good at setting up a series of meetings with the key stakeholders, the people that are making things happen,” and that Volkswagen has been “very enthusiastic” about the government’s forthcoming critical-minerals strategy.

What else is coming from Volkswagen: Volkswagen’s transformation plan has hinged on building out its software capabilities after bugs led to a leadership shakeup. Boutin said software updates are rolling out in Canada, with the new 2023 models allowing constant remote, “over the air” software updating.

“This is probably, I would say, in many ways, as challenging, if not more challenging in itself, than the overall assembly of electric vehicles. There is already progress happening,” he said. 

“We have done quite a bit of work with [BlackBerry]. … We bought some of the business of Nokia. We also are, in terms of the cloud, we’ve been working with Microsoft.” 

Buzzworthy: Larger vehicles like SUVs will be key to winning over Canadian consumers, Boutin said. VW’s electric microbus, ID Buzz, will be available for preorder in Canada next year, and Boutin said there will be “announcements shortly” about a larger sedan as the company aims to release over 25 EVs by 2030.

Meanwhile, the company is already recruiting for a new office in Canada as part of last month’s agreement, for its PowerCo division. The team will work out of VW’s Toronto-area office until a permanent location is scouted for PowerCo, he said.

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