The Volkswagen Group officially announced that it will build a new lithium-ion EV battery cell factory in North America, which will be located in St. Thomas, Ontario, Canada (midway between Toronto and Windsor).
The decision has been made several months after the group started searching for a site in Canada and the Memorandums of Understanding (MoU) with the Canadian government related to battery materials.
The group will build the battery gigafactory through its battery company PowerCo SE and it will be the first overseas plant for the company (after the Salzgitter plant in Germany and Sagunt near Valencia plant in Spain, announced earlier).
The Volkswagen Group did not reveal details, like the investment amount or manufacturing capacity, but the company confirmed that production is expected to start in 2027 and that the factory will produce new "unified cells" (the group's new form factor).
Meanwhile, Volkswagen put on hold its further battery investment in Europe, until the European Union announces its move after the United States introduced the Inflation Reduction Act of 2022 (IRA). Let's recall that due to the IRA, manufacturers have to invest in manufacturing in the US (North America) to be allowed for EV incentives.
Oliver Blume, CEO Volkswagen Group:
“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.”
Thomas Schmall, Board Member for Technology of Volkswagen AG and Chairman of the Supervisory Board of PowerCo SE:
“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.“
The new battery plant in Canada will become a key element in the plan to launch more than 25 new all-electric models through 2030 in the region.
Currently, Volkswagen produces the Volkswagen ID.4 model in Chattanooga, Tennessee. The company also announced a plan to upgrade the plants in Puebla and Silao, Mexico, for the assembly of BEVs and potentially for BEV components such as electric motors in the second half of the decade.
Another thing is the recently announced local production of all-electric Scout trucks and rugged SUVs in Columbia, South Carolina (starting in 2026). The Scout brand alone is expected to produce more than 200,000 vehicles annually at some point in the future.
"Scout vehicles are being designed and developed from the ground up on a new all-electric platform that emphasizes off-road capability. Scout Motors is backed by the Volkswagen Group and operates as an independent unit within the Group."
We guess that with all the EV plans, the Volkswagen Group might soon announce another battery gigafactory either in the US or Mexico.
Volkswagen Group's PowerCo SE battery factory in Canada:
- location: St. Thomas, Ontario, Canada
- investment: N/A
- manufacturing capacity: N/A
- battery type: Volkswagen Group's new "unified cells"
- production start: 2027
