Volkswagen to build electric vehicle battery plant in Canada

March 13, 2023 GMT
FILE - An e-Golf electric car with the VW logo on a rim is pictured in the German car manufacturer Volkswagen Transparent Factory (Glaeserne Manufaktur) in Dresden, eastern Germany, April 28, 2017. Volkswagen announced Monday, March 13, 2023, it plans to build a major plant for electric vehicle batteries in Canada. The start of production is planned for 2027. (AP Photo/Jens Meyer, File)
FILE - An e-Golf electric car with the VW logo on a rim is pictured in the German car manufacturer Volkswagen Transparent Factory (Glaeserne Manufaktur) in Dresden, eastern Germany, April 28, 2017. Volkswagen announced Monday, March 13, 2023, it plans to build a major plant for electric vehicle batteries in Canada. The start of production is planned for 2027. (AP Photo/Jens Meyer, File)

ST. THOMAS, Ontario (AP) — Volkswagen announced Monday it plans to build a major plant for electric vehicle batteries in Canada.

The European automaker said the Volkswagen Group and its battery company PowerCo will establish its first overseas ``gigafactory″ for battery cell manufacturing in St. Thomas, in southwestern Ontario. The start of production is planned for 2027.

The company signed an agreement last year with the Canadian government to work to identify suitable sites for such a facility in Canada. It also had committed to investigate ways for Canada to contribute to Volkswagen’s battery supply chains, including raw materials and assembly.

St. Thomas Mayor Joe Preston said it will be the largest automotive industrial complex in Canada’s history.

Ontario Economic Development Minister Vic Fedeli said Canada has gone from being behind the pack in the electric vehicle manufacturing sector to being one of the top players in the battery supply chain remarkably quickly.

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”(It) is a stunning move, and I think acknowledged by Volkswagen that they felt they would want to be in the middle of this whole electric battery ecosystem that we’ve created in Ontario,” Fedeli said.

Numbers such as the money being invested and jobs being created will be disclosed at a future announcement with Volkswagen representatives, Fedeli said.

The company said Canada offers ideal conditions, including a local supply of raw materials and wide access to clean electricity.

“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 co-operation,” Thomas Schmall, chairman of the supervisory board of PowerCo SE said in a statement.

The province of Ontario set the stage last month for the announcement, introducing and quickly passing a law adjusting the municipal boundaries for a 1,500-acre ``mega site″ in southwestern Ontario.

Fedeli said at the time that the piece of land had straddled two municipalities, but that it was being fit into one to eliminate bureaucratic challenges of dealing with two municipalities.

Canada has seen at least 10 major electric vehicle-related commitments totaling more than $16 billion Canadian (US$12 billion) in the past two years as federal and provincial governments work to attract investments in the sector.