(Updates paragraph 9 to say VW's ID4 will qualify for a $7,500tax credit in 2022) FRANKFURT, Aug 23 (Reuters) - German carmakers Volkswagen and Mercedes-Benz struck battery materialscooperation agreements with mineral-rich Canada on Tuesday,intensifying efforts to secure access to lithium, nickel andcobalt. The move comes as automakers roll out their electric-vehicleexpansion strategies globally in a bid to challenge sectorleader Tesla . These strategies depend on sufficientsupplies of vital battery materials. No financial details were disclosed for the memorandum ofunderstanding (MoU) agreements, which were signed in Canadaduring a visit by German Chancellor Olaf Scholz and a delegationof German corporate representatives. "The supply of battery raw materials and the production ofprecursor and cathode materials with a low carbon footprint willallow for a fast and sustainable ramp-up of battery capacity - akey lever for our growth strategy in North America," outgoingVolkswagen Chief Executive Herbert Diess said. Volkswagen aims to build, with partners, six large batterycell factories in Europe by 2030 with a capacity of around 240gigawatt-hours, as well as a dedicated factory in North Americafor which it is currently examining potential sites. VW is targeting initial capacity of 20 gigawatt-hours at theNorth American plant, said Thomas Schmall, Volkswagen AG boardmember and head of the automaker's Power Co battery unit. At a media briefing Tuesday, Schmall said the company aimsto announce the North American plant location and potentialmining and refining partners by the end of the year. "Everything in our planned rollout of electric vehiclesdepends on the supply of batteries," Schmall said. Pablo Di Si, incoming president and CEO of VW Group ofAmerica, said the automaker's U.S. plant in Chattanooga,Tennessee, aims to build 90,000 electric vehicles next year,adding that the new ID4 is expected to qualify this year for thefull $7,500 U.S. tax credit under the new Inflation ReductionAct. Mercedes-Benz, meantime, is preparing to go fully electricby the end of the decade wherever market conditions allow, andhas recently struck a deal with China's CATL toensure battery cell supply in Europe. As part of the MoU, Mercedes-Benz will explore a strategicpartnership with Rock Tech Lithium under which theCanadian firm would supply the German carmaker and its batterypartners with up to 10,000 tonnes of lithium hydroxide a yearfrom 2026. Volkswagen has said it could become a shareholder in localmining firms to make sure it is first in line when it comes tosupply. (Reporting by Christoph Steitz; Additional reporting by PaulLienert in Detroit; Editing by Miranda Murray, Mark Porter andJosie Kao)
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