The Volkswagen Group and its new battery company PowerCo have been looking for a place to build a new battery factory. A facility that could initially supply more than half a million electric vehicles per year. They have now announced the location for the gigafactory, and it is coming to Canada.
VW and PowerCo announced last year that they were looking to build a battery plant in North America, but weren't willing to narrow down the list of locations. Though CEO Oliver Blume called Canada "a logical option" for a plant based on this continent.
That announcement came just a few months after VW Group and the federal government
entered a memorandum of understanding surrounding EV battery raw materials. The MoU said that both parties planned to continue to cooperate with the Canadian mining sector to secure a supply of metals like lithium, cobalt, and nickel, all crucial to EV battery cells.
Today's announcement is the plant location. The PowerCo gigafactory will be built in St. Thomas, Ontario. The city was previously home to a Ford auto factory as well as a Sterling truck plant. City officials recently announced that they had made possible a new 600-hectare site they were pitching to automakers for exactly this purpose.
“Our gigafactory in Canada sends a strong message: PowerCo is on track to become a global battery player. With the expansion to North America, we will enter a key market for e-mobility and battery cell production, driving forward our global battery strategy at full speed. 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 cooperation. We are committed to be a reliable partner and good neighbor for the people in St. Thomas and Ontario,“ said PowerCo Chair Thomas Schmall.
This is the second gigafactory announcement for Canada. The first came from Stellantis, which announced plans for a $5b EV battery plant that is currently under construction in Windsor, ON. While the Stellantis/LG Chem plant is expected to open in 2024, the Volkswagen Group plant is set for 2027.
“Today’s announcement by Volkswagen is a true testament to our highly skilled workforce and Canada’s strong and growing battery ecosystem. VW’s decision to establish its first overseas gigafactory in Canada speaks to our country’s competitiveness when it comes to attracting major investments. It is also a vote of confidence in Canada as the green supplier of choice to the world. With Volkswagen and PowerCo, our government looks forward to working together towards a cleaner, more sustainable and resilient economy,“ said the Honourable François-Philippe Champagne, Canada’s Minister of Innovation, Science and Industry.
Volkswagen Group's facility will construct battery cells. Hundreds of these cells go into each EV battery pack. The cells will supply VW's existing plant in Chattanooga, TN. They will also go to the new Scout EV-off-road vehicle VW is planning to build in South Carolina.