Volkswagen announced today that its first battery factory outside Europe will be located in St. Thomas, Ontario. The location will build the automaker’s new unified cells, with the start of production projected to happen in 2027.
St. Thomas is located about two hours southwest of Canada‘s largest city, Toronto, and roughly an hour from the U.S. border. That will be an important geographic advantage for the gigafactory, operated by VW subsidiary PowerCo, which will supply VW’s North American vehicle manufacturing sites, all of which are located in the United States and Mexico.
“Our gigafactory in Canada sends a strong message: PowerCo is on track to become a global battery player,” said Thomas Schmall, VW’s head of technology. “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.”
Read: Scout Motors Teases New SUV And Pickup EVs As It Confirms $2B South Carolina Factory
Canada was chosen for its natural resources, such as minerals important to battery manufacturing, as well as its access to clean electricity, the automaker said. The deal is part of a larger plan that seeks to establish a wider battery supply line in the nation.
“VW’s decision to establish its first overseas gigafactory in Canada speaks to our country’s competitiveness when it comes to attracting major investments,” said François-Philippe Champagne, Canada’s Minister of Innovation, Science and Industry. “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.”
The deal will also be important for Volkswagen, as it looks to benefit from incentives for electric vehicles in the U.S. As the nation seeks to write rules on materials sourcing that disfavor Chinese battery production, Canada is likely to be among the nations from which parts can be sourced.
Further details on the plant will be released at a later date, but the unified cells being made there will go into vehicles produced at Scout’s upcoming South Carolina plant, and VW’s Tennessee factory.
“Electric mobility is our opportunity for growth in the North American Region, and we’re pushing ahead with an ambitious strategy to take a leading position,” said Pablo Di Si, CEO of Volkswagen North America. “Over the next few years, we will bring many more all-electric models to customers and communities.”
