Toronto, Ontario — In this weekly Tuesday Ticker, two German OEMs sign deals to access Canadian metals, while Honda reportedly considers the viability of its Chinese supply chain.
Double deals for Canada
Both Mercedes-Benz and Volkswagen Group signed deals with the Canadian government last week. The newly-inked agreements will see the automakers secure access to Canada’s largest stores of key battery materials—like lithium cobalt, nickel and graphite—for use in electric vehicles (EVs).
“What we are experiencing right now is a perfect storm — a multitude of overlapping and mutually reinforcing global crises,” German Chancellor Olaf Scholz said at the event hosted by the Canadian-German Chamber of Industry and Commerce. He pointed specifically to Russia’s invasion of Ukraine and its ripple effects on the energy and resource sectors.
Shares of Volkswagen are up nearly three percent in the days following the news; shares of Mercedes-Benz are currently up 1.4 percent from Aug. 22’s close, the day prior to the agreement announcement.
Honda in the hot seat
Honda is allegedly considering building a separate supply chain that would reduce its dependency on the Chinese market, according to a report from the Sankei newspaper.
Many large-scale Japanese companies have built extensive production hubs in China—though operations have been dampened by the nation’s COVID-19-related lockdowns.
Nearly 40 percent of Honda’s automobile production took place in China in the last financial year.
Sankei said that Honda would keep its supply chain in China for the domestic Chinese market, but would build a second site for markets outside of China. The newspaper did not cite an information source.
A Honda spokesperson said Sankei’s report is not something announced by the company, adding it has been working on reviewing and risk-hedging its supply chain in general.
