Canada chosen for first Volkswagen EV battery plant in North America

TORONTO –

Volkswagen has announced it plans to build an electric vehicle battery plant in southwestern Ontario.

The European automaker announced Monday that the Volkswagen Group and its battery company PowerCo will establish its first overseas “gigafactory” for battery cell manufacturing in St. Thomas, Ont., with the start of production planned for 2027.

The company said Canada offers ideal conditions, including a local supply of raw materials and wide access to clean electricity.

“Canada and Ontario are perfect partners for scaling up our battery business and green economy jobs, as we share the same values of sustainability, responsibility and co-operation,” Thomas Schmall, chairman of the supervisory board of PowerCo SE said in a statement.

“We are committed to be a reliable partner and good neighbor for the people in St. Thomas and Ontario.”

The company signed an agreement last year with the federal government to work to identify suitable sites for such a facility in Canada, and they had also committed to investigate ways for Canada to contribute to Volkswagen’s battery supply chains, including raw materials and assembly.

Federal Industry Minister Francois-Philippe Champagne and Ontario Economic Development Minister Vic Fedeli said in a joint statement that the announcement is a “major vote of confidence” in Canada and Ontario being global leaders in the EV supply chain.

“With a highly skilled workforce, clean energy, an abundance of critical minerals, access to markets, and a flourishing automotive and battery sector, we are an attractive investment destination with everything companies need to grow,” the ministers wrote.

“This investment is another significant step forward as we build a clean transportation sector to meet global and North American demand for zero-emission vehicles.”

Canada has seen at least 10 major electric vehicle-related commitments totalling more than $16 billion in the past two years as federal and provincial governments work to attract investments in the sector.

Ontario set the stage last month for the Volkswagen announcement, introducing and quickly passing a law adjusting the municipal boundaries for a 1,500-acre “mega site” in southwestern Ontario.

Fedeli said at the time that the site straddled St. Thomas and Central Elgin, and putting the entire piece of land within St. Thomas would eliminate the red tape and barriers that could come with future companies having to deal with two municipalities.

This report by The Canadian Press was first published March 13, 2023.