Volkswagen plans North American battery plant, paving way for more EV tax credits
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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The India-flagged oil tanker Desh Ujaala is pictured in the Gulf waters near Al-Basrah Oil Terminal (ABOT), about 50 kilometres offshore of Iraq’s southern Faw peninsula, on August 5, 2025.
Hussein Faleh | AFP | Getty Images
U.S. President Donald Trump said Wednesday that Indian Prime Minister Narendra Modi told him New Delhi will stop buying oil from Russia, though the move will take time.
“[Modi] assured me today that they will not be buying oil from Russia. That’s a big stop.” Trump said at the press briefing in the Oval Office. “Now we’ve got to get China to do the same thing.”
He added that Washington was unhappy with New Delhi’s purchases of Russian crude because it allowed Moscow to continue waging its “ridiculous war” in Ukraine.
However, the U.S. president also said that the halt will not be immediate, and there will be “a little bit of a process,” without giving a clear timeline.
India’s external affairs ministry said Friday that the country’s oil import decisions are driven by efforts to protect consumers by ensuring stable energy prices and securing supplies.
The ministry’s priority was to “safeguard the interests of the Indian consumer in a volatile energy scenario,” External Affairs Ministry spokesperson Randhir Jaiswal said in a statement.
He added that India’s import policies are guided “entirely” by that goal.
Jaiswal said that India has sought for years to expand energy trade with the U.S. “This has steadily progressed in the last decade,” he said, adding that “the current Administration has shown interest in deepening energy cooperation with India. Discussions are ongoing.”
India and Russian crude
India’s imports of Russian oil have been a sticking point in the relationship between Washington and New Delhi. Trump slapped additional tariffs of 25% on India back in August, raising the total levy to 50%, while India has called out the U.S. for its trade with Russia.
“If India doesn’t buy [Russian] oil, it makes [ending the war] much easier,” Trump said. “They assured me within a short period of time, they will not be buying oil from Russia, and they will go back to Russia after the war is over.”
On Thursday, Brent crude futures climbed 0.82% to $62.43 a barrel by 10:31 p.m. ET, while U.S. West Texas Intermediate futures climbed 0.89% to $58.79.
India is one of the biggest buyers of Russian oil. Data from research firm Kpler shows Russia exports about 3.35 million barrels of crude per day, with India taking about 1.7 million and China 1.1 million.
New Delhi has defended those purchases, with Energy Minister Hardeep Singh Puri telling CNBC in July that New Delhi helped stabilize global energy prices and was encouraged by the U.S. to do so.
“If people or countries had stopped buying at that stage, the price of oil would have gone up to 130 dollars a barrel. That was a situation in which we were advised, including by our friends in the United States, to please buy Russian oil, but within the price cap,” Puri said.
Russian sales of crude oil have been placed under a price cap by the G7 nations and the European Union since Moscow’s 2022 invasion of Ukraine.
That price cap, set at $47.6 per barrel, aims to limit Moscow’s revenue from oil exports, constricting the country’s ability to finance its war in Ukraine.
Kia is about to go on the offensive. The automaker plans to nearly triple electric vehicle production in Europe within the next two years as it introduces the new EV2 and EV4.
Kia doubles down on EV2 and EV4 production plans
With the EV2 and EV4 joining the lineup, Kia will offer an electric vehicle for nearly everyone. The EV2 is Kia’s smallest, most affordable electric car, set to sit below the EV3.
Despite its compact size, Kia said the EV2 will “redefine urban electric mobility” with a flexible interior, its latest connectivity tech, and more.
According to Kia’s CEO, Ho Sung Song, the company plans to build about 100,000 EV2s at its Zilina plant in Slovakia.
“The average annual production of the upcoming EV2 is expected to reach around 100,000 units at the Zilina plant in Slovakia in 2027,” Song told Automotive News Europe earlier this month.
Kia is also scaling up output of its first electric hatchback, the EV4. By 2027, Kia plans to build over 80,000 EV4s at the Zilina plant. If you add in the EV4 Fastback or sedan models built in Korea, “the EV4’s combined global production is expected to reach approximately 100,000 units,” Kia’s CEO said.
Song explained that Kia aims to produce 100,000 EV2 and EV4 models globally each year, as this volume will be high enough to make them profitable.
The new production target is considerably higher than what Kia Europe CEO Marc Hedrich told Automotive News Europe in August.
Hedrich said that combined EV2 and EV4 production could account for 10% and 20% of the output at the Zilina plant in 2026, adding that a production goal of 20,000 to 30,000 EV4s “would certainly make sense” next year.
Officials from Kia Europe explained that production plans shifted after the EV4 received better-than-expected feedback following its launch in August.
Kia began EV4 production on August 20, marking a milestone as its first EV built in Europe. Kia is investing €108 million ($125 million) in the Zilina plant to produce the EV2 and EV4. The EV2 will join in 2026.
The facility has the capacity to build 320,000 vehicles, but Kia said output could be expanded to 350,000 with overtime.
Kia has yet to reveal final specs, but given the EV3 is about 4,300 mm (169.3″) in length, the EV2 is expected to be slightly smaller at around 4,000 mm (157″). That’s about the size of Hyundai’s entry-level EV, the Inster, at 3,825 mm (150″) in length.
Like the EV9 and recently launched EV5, Kia’s compact electric car features a more upright, crossover-SUV-like design.
Although Kia’s overall sales are down 3% in Europe through August, EV sales are up 56% to 71,179. The EV3 is driving growth as Kia’s second-best-selling vehicle behind the Sportage and as the seventh best-selling EV in Europe. Through the first eight months of 2025, Kia sold 45,269 EV3s in the region.
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Honda’s electric SUV was the third most popular EV in the US in August, behind the Tesla Model Y and Model 3. Offering over $12,000 in average incentives, the Honda Prologue scored big as buyers rushed to claim the federal EV tax credit.
Honda Prologue registrations surge with huge incentives
As the $7,500 credit expired at the end of September, automakers were offering pretty notable discounts, many in the five digits with combined incentives.
The Honda Prologue has been one of the most discounted EVs over the past few months. Last month, buyers could score up to over $20,000 in combined savings, including a $7,500 credit, $9,500 in financing bonuses, trade-in offers, and 0% interest for six years.
According to the latest registration data from S&P Global Mobility (via Automotive News), the incentives helped propel the Honda Prologue to become the third most popular EV in August.
A total of 138,457 EVs were registered in the US in August, up 24% from a year ago. Honda Prologue registrations surged 81% to 9,005 vehicles, the data showed.
Since some automakers don’t report monthly or US sales numbers, the S&P Global Mobility data offers a snapshot of sales performance.
The Prologue was yet again one of the most discounted models, with incentives of $12,704 in August, according to Motor Intelligence. Last August, Prologue incentives were just $5,813. Honda’s gas-powered CR-V had just $2,016 in incentives in August.
Although the $7,500 credit expired on September 30, Honda is still offering generous incentives for Prologue buyers and lessees.
The 2025 Honda Prologue is available with up to $16,550 in lease cash in most states. Alternatively, Honda is offering 0% APR financing for up to 60 months.
2025 Honda Prologue trim |
Starting Price* | EPA Range (miles) |
| EX (FWD) | $47,400 | 308 |
| EX (AWD) | $50,400 | 294 |
| Touring (FWD) | $51.700 | 308 |
| Touring (AWD) | $54,700 | 294 |
| Elite (AWD) | $57,900 | 283 |
Although the Acura ZDX will not return for a 2026 model year, Honda is planning to launch the 2026 Prologue. We have yet to learn prices, but we could see it priced slightly lower due to the loss of the $7,500 EV credit.
Hyundai announced earlier this month it’s reducing 2026 IONIQ 5 prices by up to nearly $10,000 on some trims. The 2026 Hyundai IONIQ 5 now starts at under $35,000. Will Honda match it?
Want to check out the Prologue for yourself? You can use our link to find available Honda Prologue models in your area (trusted affiliate link).
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