Volkswagen Group plans to build its first North American battery cell manufacturing plant in St. Thomas, Ont., as the automaker establishes a regional supply chain to build electric vehicles for Canada, the U.S. and Mexico.
The company and its in-house battery subsidiary PowerCo on Monday announced the landmark investment in the southwestern Ontario city midway between Toronto and Windsor.
Financial details weren't immediately disclosed, though François-Philippe Champagne, Canada’s minister of innovation, science and industry, told reporters in Montreal it will be “the largest single investment” in Canadian automotive history. To hit that mark, spending will need to eclipse the $5 billion (US$4.1 billion) joint commitment from Stellantis and LG Energy Solution for a battery plant in Windsor announced last year.
Volkswagen said the plant is scheduled to begin producing battery cells in 2027. It shared few other specifics. The value of the investment and further details about production capacity are expected to be announced at an event in St. Thomas in the coming weeks.
Thomas Schmall, Volkswagen’s technology chief as well as chair of the PowerCo board, said the investment will drive the automaker’s battery strategy forward “at full speed.”
“Our gigafactory in Canada sends a strong message: PowerCo is on track to become a global battery player,” he said in a release.
Ontario is already home to assembly operations of five global automakers, but Volkswagen will be the first European brand to put down significant roots in the province.
The investment will be a “huge game-changer” for the country’s auto sector, Champagne, told Automotive News Canada.
“When these big automakers come, they bring their whole supply chain with them. It’s almost difficult to fathom the scale of opportunities.”
Despite stiff competition, Canada has for months appeared to be the frontrunner for Volkswagen’s inaugural battery cell site.
In August, the company signed a memorandum of understanding with the Canadian government to cooperate on building a supply chain for battery-electric vehicles. And in December, the automaker singled out Canada as “one logical option” for the plant, though it cautioned other countries were also being considered.
The site for the new plant in St. Thomas is bookended by two railway lines, and has strong highway and utility links, according to the St. Thomas Economic Development Corp., which has spent about two years assembling the greenfield development site.
The 1,500-acre (600-hectare) plot of land sits at the northeastern edge of the city, and until March 2 was partially part of the neighbouring municipality of Central Elgin. Provincial legislation redrew the borders around the city earlier this month, putting the entire site within St. Thomas.
Vic Fedeli, the province’s minister of economic development, job creation and trade, told Automotive News Canada in early March that putting the megasite under one local government was the final component needed to “lure” the next big investor to the province.
