Volkswagen’s subsidiary PowerCo will establish an electric vehicle (EV) battery manufacturing facility in St. Thomas, Ontario, Canada. The Volkswagen Group’s first overseas gigafactory for cell manufacturing will produce sustainable unified cells, and the start of production is planned for 2027.
The decision to expand the PowerCo cell production ramp-up from Europe to Canada is further proof of the ambitious growth strategy of the Group in North America.
“Our North American strategy is a key priority in our 10-point-plan that we’ve laid out last year. With the decisions for cell production in Canada and a Scout site in South Carolina we’re fast-forwarding the execution of our North American strategy,” said Oliver Blume, CEO Volkswagen Group.
PowerCo expansion is next step of ramping up global battery business while localizing cell production and setting up new value chain. Volkswagen Group is one of the world’s largest automakers, with $295.8 billion in revenue in 2022. It manages a portfolio of 10 companies.
“This historic investment is a testament to Canada’s strong and growing battery ecosystem and Ontario’s competitive business environment. 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. In addition, Canada and Ontario offer stability and predictability to their business partners,” said François-Philippe Champagne, Canada’s Minister of Innovation, Science and Industry, and Vic Fedeli, Ontario’s Minister of Economic Development, Job Creation and Trade, in a joint statement.
“The automotive sector has been the economic driver for St. Thomas for over 50 years and this once-in-a-generation commitment from Volkswagen will serve to continue that for decades to come,” said Sean Dyke, CEO, St. Thomas Economic Development Corporation. “After an exhaustive site search across North America, we are honored that our property was chosen as the home of the largest automotive investment in Canadian history and see this as proof that Ontario’s not just open for business, but truly ready for business. I can’t wait to see the resounding effects this will have on our community and the entire region as we grow with an amazing partner into the future.”
Canada’s auto sector supports nearly 500,000 workers, contributes over $11 million annually to Canada’s gross domestic product, and is one of the country’s largest export industries. Ontario’s auto supply chain comprises over 700 parts firms, over 500 tool, die, and mold makers, and over 300 connected and autonomous companies.
Canada and Ontario are top destinations for European investors, with recent investments in the battery supply chain by companies like Belgium’s Umicore, demonstrating the strong and growing potential for collaboration in the clean technology and automotive space.