EV batteries: Volkswagen to build plant in Ontario

TORONTO –

Volkswagen is building an electric vehicle battery plant in southwestern Ontario, the automaker said Monday, an announcement heralded by the province’s economic development minister as an example of the rapid turnaround in Canada’s growing sector.

European car manufacturer announced that the Volkswagen Group and its battery company PowerCo will establish its first overseas “gigafactory” for battery cell production in St. Thomas, Ont., with production scheduled to begin in 2027.

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

“Canada and Ontario are perfect partners to grow our battery business and jobs in the green economy because we share the same values ​​of sustainability, responsibility and cooperation,” said Thomas Schmoll, Chairman of the Supervisory Board of PowerCo SE.

“We are committed to being a reliable partner and good neighbor to the people of St. Thomas and Ontario.”

Ontario Economic Development Minister Vic Fedelli said Canada has moved remarkably quickly from being a leader in electric vehicle manufacturing to becoming a leading player in the battery supply chain.

“(It’s) an amazing move, and I think it was recognized by Volkswagen that they felt they would like to be in the middle of this whole electric battery ecosystem that we’ve created in Ontario,” Fedelli said in an interview.

This will be the second electric vehicle battery plant in Ontario. Last year, carmaker Stellantis and South Korean battery maker LG Energy Solution built a $5 billion facility in Windsor, Ont.

Figures such as the amount invested and the jobs created will be revealed at a future announcement with Volkswagen representatives, Fedelli said.

Since 2020, Canada and Ontario have attracted more than $17 billion in investment in the fast-growing sector.

Fedelli and federal Industry Minister François-Philippe Champagne said in a joint statement that the announcement was a “big vote of confidence” for Canada and Ontario, which are global leaders in the electronics supply chain.

“With a highly skilled workforce, clean energy, an abundance of key minerals, access to markets, and a thriving automotive and battery sector, we are an attractive investment destination with everything companies need to grow,” the ministers wrote.

“This investment is another important step forward as we build a clean transportation industry to meet global and North American demand for zero-emission vehicles.”

Last year, the company signed an agreement with the federal government to work to identify suitable locations for such a facility in Canada, and they also committed to investigating ways for Canada to contribute to Volkswagen’s battery supply chains, including raw materials and assembly.

Ontario set the stage for Volkswagen’s announcement last month by introducing and quickly passing legislation governing municipal boundaries for the 1,500-acre “mega site” in southwestern Ontario.

Fedelli said at the time that the area is between St. Thomas and Central Elgin, and putting all of the land within St. Thomas would eliminate the red tape and hurdles that could arise with future companies having to deal with both communities.

Flavio Volpe, president of the Association of Auto Parts Manufacturers, praised the hard work of both levels of government in Monday’s announcement.

“Canada now boasts major investments in electric vehicles from six of the world’s top seven automakers,” he said in an interview.

“For a country with no domestic brands of its own, this is unprecedented and speaks to the global competitive value of investing billions here.”

This report by The Canadian Press was first published on March 13, 2023.