Volkswagen Group CEO Oliver Blume recently shared that the company is actively searching for a home for its first battery cell factory in North America. Furthermore, Blume has named Canada specifically as “one logical option.” By joining Volkswagen’s current EV production footprint in Tennessee, the Group may soon meet the battery manufacturing requirements outlined in the Inflation Reduction Act for vehicles like the ID.4 to continue to qualify for US federal tax credits, while opening the door for more EVs under its umbrella to qualify.
On the whole, Volkswagen Group is putting a lot of funding and effort into becoming an all-electric company across most of its marques, including Audi and Porsche. As an automotive brand, Volkswagen especially has help lead the charge (no pun intended) for legacy automakers shifting their business strategies to support the growing wave of zero-emission vehicles.
In the US in particular, VW has revamped some of its production to support EV manufacturing in Chattanooga, Tennessee where it is now rolling out ID.4s. Furthermore, Volkswagen Group has shared intentions for a second faciilty on US soil that could also include a battery cell plant.
Under current tax credits, the Volkswagen ID.4 qualifies for up to $7,500 in federal tax credits, but those numbers will be cut next month when new terms kick in as part of the Inflation Reduction Act signed by President Biden in August. Since the ID.4 is assembled in the US, it could still qualify for some level of tax credit, but either the battery components and/or critical materials must come from the US or a free trade partner as well, a requirement Volkswagen is quite aware of.
A mere week after the President signed the IRA, Volkswagen announced a supply agreement with the Canadian government to obtain raw materials for battery manufacturing in the US. Now, it appears Volkswagen group is taking battery manufacturing a step further by erecting its own facility – its first on the continent.
Volkswagen to bolster battery production in North America
Volkswagen Group CEO Oliver Blume reaffirmed the company’s intention to bring battery manufacturing the North America, particularly to support EV production in the US. Although the company is still searching, our neighbors to the north sound like a viable candidate:
Canada is one logical option for the construction of a gigafactory in the region of North America.
Blume went on to cite high standards in sustainability and ideal economic conditions as factors that could soon make Canada home to Volkswagen’s first battery gigafactory outside of Europe. Conversely, the Group’s battery subsidiary PowerCo also announced an extended deal with Umicore out of Belgium to ship cathode materials to Canada. Volkswagen said this agreement is part of a long-term strategic partnership to support its full intentions of future battery cell production in North America.
While many European automakers have scoffed at the revised tax credit terms in the Inflation Reduction Act as unfair, the legislations intention to bring more EV manufacturing to North America already appears to be working. By adding battery production to the continent, more Volkswagen Group’s automotive brands may soon qualify for tax credits.
Recently reborn off-road nameplate Scout could be one of those marques, especially since it is reportedly in talks with contract manufacturer Foxconn to help build its EVs. Foxconn currently operates out of the famed Lordstown facility in Ohio. Add VW Group’s planned battery plant, and you may have several more models available to US customers that qualify for credits (pending MSRP of course).
We’d expect the next update in Volkswagen Group’s search process to include the location of the pending battery plant, and Canada appears to now be the frontrunner.
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Wind energy powered 20% of all electricity consumed in Europe (19% in the EU) in 2024, and the EU has set a goal to grow this share to 34% by 2030 and more than 50% by 2050.
To stay on track, the EU needs to install 30 GW of new wind farms annually, but it only managed 13 GW in 2024 – 11.4 GW onshore and 1.4 GW offshore. This is what’s holding the EU back from achieving its wind growth goals.
Three big problems holding Europe’s wind power back
Europe’s wind power growth is stalling for three key reasons:
Permitting delays. Many governments haven’t implemented the EU’s new permitting rules, making it harder for projects to move forward.
Grid connection bottlenecks. Over 500 GW(!) of potential wind capacity is stuck in grid connection queues.
Slow electrification. Europe’s economy isn’t electrifying fast enough to drive demand for more renewable energy.
Brussels-based trade association WindEurope CEO Giles Dickson summed it up: “The EU must urgently tackle all three problems. More wind means cheaper power, which means increased competitiveness.”
Permitting: Germany sets the standard
Permitting remains a massive roadblock, despite new EU rules aimed at streamlining the process. In fact, the situation worsened in 2024 in many countries. The bright spot? Germany. By embracing the EU’s permitting rules — with measures like binding deadlines and treating wind energy as a public interest priority — Germany approved a record 15 GW of new onshore wind in 2024. That’s seven times more than five years ago.
If other governments follow Germany’s lead, Europe could unlock the full potential of wind energy and bolster energy security.
Grid connections: a growing crisis
Access to the electricity grid is now the biggest obstacle to deploying wind energy. And it’s not just about long queues — Europe’s grid infrastructure isn’t expanding fast enough to keep up with demand. A glaring example is Germany’s 900-megawatt (MW) Borkum Riffgrund 3 offshore wind farm. The turbines are ready to go, but the grid connection won’t be in place until 2026.
This issue isn’t isolated. Governments need to accelerate grid expansion if they’re serious about meeting renewable energy targets.
Electrification: falling behind
Wind energy’s growth is also tied to how quickly Europe electrifies its economy. Right now, electricity accounts for just 23% of the EU’s total energy consumption. That needs to jump to 61% by 2050 to align with climate goals. However, electrification efforts in key sectors like transportation, heating, and industry are moving too slowly.
European Commission president Ursula von der Leyen has tasked Energy Commissioner Dan Jørgensen with crafting an Electrification Action Plan. That can’t come soon enough.
More wind farms awarded, but challenges persist
On a positive note, governments across Europe awarded a record 37 GW of new wind capacity (29 GW in the EU) in 2024. But without faster permitting, better grid connections, and increased electrification, these awards won’t translate into the clean energy-producing wind farms Europe desperately needs.
Investments and corporate interest
Investments in wind energy totaled €31 billion in 2024, financing 19 GW of new capacity. While onshore wind investments remained strong at €24 billion, offshore wind funding saw a dip. Final investment decisions for offshore projects remain challenging due to slow permitting and grid delays.
Corporate consumers continue to show strong interest in wind energy. Half of all electricity contracted under Power Purchase Agreements (PPAs) in 2024 was wind. Dedicated wind PPAs were 4 GW out of a total of 12 GW of renewable PPAs.
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In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss the official unveiling of the new Tesla Model Y, Mazda 6e, Aptera solar car production-intent, and more.
As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.
After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:
We now have a Patreon if you want to help us avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.
Here are a few of the articles that we will discuss during the podcast:
Here’s the live stream for today’s episode starting at 4:00 p.m. ET (or the video after 5 p.m. ET):
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The Chinese EV leader is launching a new flagship electric sedan. BYD’s new Han L EV leaked in China on Friday, revealing a potential Tesla Model S Plaid challenger.
What we know about the BYD Han L EV so far
We knew it was coming soon after BYD teased the Han L on social media a few days ago. Now, we are learning more about what to expect.
BYD’s new electric sedan appeared in China’s latest Ministry of Industry and Information Tech (MIIT) filing, a catalog of new vehicles that will soon be sold.
The filing revealed four versions, including two EV and two PHEV models. The Han L EV will be available in single- and dual-motor configurations. With a peak power of 580 kW (777 hp), the single-motor model packs more power than expected.
BYD’s dual-motor Han L gains an additional 230 kW (308 hp) front-mounted motor. As CnEVPost pointed out, the vehicle’s back has a “2.7S” badge, which suggests a 0 to 100 km/h (0 to 62 mph) sprint time of just 2.7 seconds.
To put that into perspective, the Tesla Model S Plaid can accelerate from 0 to 100 km in 2.1 seconds. In China, the Model S Plaid starts at RBM 814,900, or over $110,000. Speaking of Tesla, the EV leader just unveiled its highly anticipated Model Y “Juniper” refresh in China on Thursday. It starts at RMB 263,500 ($36,000).
BYD already sells the Han EV in China, starting at around RMB 200,000. However, the single front motor, with a peak power of 180 kW, is much less potent than the “L” model. The Han EV can accelerate from 0 to 100 km/h in 7.9 seconds.
At 5,050 mm long, 1,960 mm wide, and 1,505 mm tall with a wheelbase of 2,970 mm, BYD’s new Han L is roughly the size of the Model Y (4,970 mm long, 1,964 mm wide, 1,445 mm tall, wheelbase of 2,960 mm).
Other than that it will use a lithium iron phosphate (LFP) pack from BYD’s FinDreams unit, no other battery specs were revealed. Check back soon for the full rundown.