Volkswagen has chosen Canada for the site of its new electric vehicle battery factory, its first in North America.
March 13 (UPI) -- Volkswagen has chosen Canada for the site of its new electric vehicle battery factory, its first in North America.
Volkswagen Group announced the decision to set up its PowerCo battery cell factory in St. Thomas, Ontario, Canada, in a press release on Monday. Production is slated to begin at the factory starting in 2027.
The battery cell factory in Canada adds to Volkswagen Group's footprint in North America, following the announcement earlier this month that subsidiary Scout Motors will build a $2 billion electric vehicle manufacturing plant in South Carolina.
"Our [factory] in Canada sends a strong message: PowerCo is on track to become a global battery player," Thomas Schmall, chairman of PowerCo's supervisory board, said in a statement. "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."
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Volkswagen said Canada "offers ideal conditions" with access to local raw materials and clean energy.
The company plans to develop 25 new battery-powered electric vehicles by the end of the decade. It also intends to increase production at its Chattanooga, Tenn., plant and upgrade its facilities in Puebla and Silao, Mexico, to produce electric vehicles and components at those sites.
"Today's announcement by Volkswagen is a true testament to our highly skilled workforce and Canada's strong and growing battery ecosystem," Francois Phillippe Champagne, Canada's minister of innovation, said in a statement.
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"VW's decision to establish its first overseas [factory] in Canada speaks to our country's competitiveness when it comes to attracting major investments," he said. "It is also a vote of confidence in Canada as the green supplier of choice to the world."
Volkswagen picks Ontario for first battery factory outside Europe
The facility in St. Thomas, Ont. is expected to begin production in 2027
Alicja Siekierska
The Volkswagen Group has picked St. Thomas, Ont. for the site of its first battery cell factory outside of Europe as the carmaker's first ramps up expansion in North America. (AP Photo/Michael Sohn)
The Volkswagen Group has picked St. Thomas, Ont. for the site of its first battery cell factory outside of Europe, as the carmaker ramps up expansion in North America.
The German carmaker made the announcement Monday, with production expected to start in 2027.
"We now have the unique opportunity to grow profitably in North America and play a key role in driving the transition to electric mobility there," Volkswagen chief financial officer Arno Antlitz said in a statement.
"We will be able to address an even broader range of customers. Volkswagen has the right strategy, products and scale to take a strong position in the North American market."
Volkswagen previously signed a memorandum of understanding with the Canadian government to boost cooperation on the development of battery production, with a key focus on supplying minerals such as lithium, nickel and cobalt.
"Today’s news is a major vote of confidence in Canada and Ontario, and in our shared work to position the country and the province as a global leader on the electric vehicle supply chain," federal innovation minister François-Philippe Champagne and Ontario's minister of economic development Vic Fedeli said in a joint statement.
"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."
The federal and provincial governments did not say how much money is being put forward for the projects. Each level of government has provided hundreds of millions of dollars in financial assistance to other electric vehicle production projects.
Volkswagen is the latest automaker to select Canada as the site for production related to electric vehicle manufacturing. Stellantis and General Motors previously announced plans to open new manufacturing facilities in Ontario and Quebec, respectively, while Ford said it will retool its Oakville assembly plant to build battery electric vehicles.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
The facility in St. Thomas, Ont. is expected to begin production in 2027
Alicja Siekierska
The Volkswagen Group has picked St. Thomas, Ont. for the site of its first battery cell factory outside of Europe as the carmaker's first ramps up expansion in North America. (AP Photo/Michael Sohn)
The Volkswagen Group has picked St. Thomas, Ont. for the site of its first battery cell factory outside of Europe, as the carmaker ramps up expansion in North America.
The German carmaker made the announcement Monday, with production expected to start in 2027.
"We now have the unique opportunity to grow profitably in North America and play a key role in driving the transition to electric mobility there," Volkswagen chief financial officer Arno Antlitz said in a statement.
"We will be able to address an even broader range of customers. Volkswagen has the right strategy, products and scale to take a strong position in the North American market."
Volkswagen previously signed a memorandum of understanding with the Canadian government to boost cooperation on the development of battery production, with a key focus on supplying minerals such as lithium, nickel and cobalt.
"Today’s news is a major vote of confidence in Canada and Ontario, and in our shared work to position the country and the province as a global leader on the electric vehicle supply chain," federal innovation minister François-Philippe Champagne and Ontario's minister of economic development Vic Fedeli said in a joint statement.
"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."
The federal and provincial governments did not say how much money is being put forward for the projects. Each level of government has provided hundreds of millions of dollars in financial assistance to other electric vehicle production projects.
Volkswagen is the latest automaker to select Canada as the site for production related to electric vehicle manufacturing. Stellantis and General Motors previously announced plans to open new manufacturing facilities in Ontario and Quebec, respectively, while Ford said it will retool its Oakville assembly plant to build battery electric vehicles.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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