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Volkswagen Group (VW) is pushing ahead with its ambitious electric vehicle (EV) strategy in North America. Its battery company PowerCo SE aims to build its largest gigafactory to date in St Thomas, Ontario/Canada with an annual production capacity of up to 90GWh in the final expansion phase.
The planned investment of up to 4.8 billion euros until 2030 has the potential to create up to 3,000 highly skilled jobs at the factory and tens of thousands more indirect jobs in the region.
Canadian Prime Minister Justin Trudeau said: “When we talk about our made-in-Canada plan, we are talking about creating good, middle-class jobs now and into the future, we are talking about clean air for our kids and grandkids, and we are talking about a strong economy that works for all Canadians. That is what VW’s new EV battery plant in St Thomas – the largest manufacturing plant in the country once built – is all about. It is a win for workers, for the community, and for the economy.”
Thomas Schmall, VW Board Member for Technology, said: “North America plays a key role in our global battery strategy. The region will become PowerCo SE’s second pillar beside Europe, with battery cells made in North America for North America. Gigafactory St Thomas opens the door to a key market for e-mobility and battery cell production. We aim to make PowerCo a global player in the battery business and to pave the way for clean, sustainable mobility. It is an important milestone in our roadmap.”
Proof point for VW’s ambitious growth strategy in North America, St Thomas is the company’s first overseas gigafactory for cell manufacturing and will equip the Group brands’ BEVs in the North American region with cutting-edge unified cells, a whole new cell technology designed for volume production. Ground breaking is planned for 2024 and production is projected to begin in 2027.
The cell factory is part of a larger plan that VW and PowerCo agreed upon with the Canadian government in August last year. The Memorandum of Understanding (MoU) signed at the time focuses on battery value creation and raw material security in order to promote e-mobility in the country.
The decision to expand PowerCo SE’s cell production network to Canada is further proof of the ambitious growth strategy of the VW Group in North America. This includes the introduction of the broadest portfolio of full-electric vehicles in the USA and Canada by 2030, the expansion of Electrify America’s coast-to-coast charging network in the USA and Canada as well as the announcement of the iconic Scout brand to deliver its first all-electric vehicles in 2026.
Frank Blome, CEO of PowerCo SE, said: “We are honoured to partner with Canada, Ontario, and the City of St Thomas to take the EV industry to a new level. PowerCo was founded in Europe to make a difference in the battery business, offering cutting-edge cell technology and sustainable manufacturing. That includes the creation of up to 3,000 new jobs and great working conditions for our employees in the St. Thomas area. We share the same values and are committed to be a reliable partner for the people in St. Thomas and Ontario.”
The cell factory is being built over an area of around 370 acres, which corresponds to more than 210 football fields. The entire industrial and supplier park amounts to 1,500 acres. Its strategic location about 30km south of London, Ontario, is at the heart of the Great Lakes Automotive Corridor and near major cities such as Toronto and Detroit. That gives PowerCo prime access to the regional research and innovation cluster, talented workforce, good transport infrastructure and established supply chains. Furthermore, the cell factory will be supplied with 100% CO
2-free energy.
Ontario is a leader in the global automotive industry and right on track to become a powerhouse in the emerging EV space. With more than 700 automotive-related companies, full access to critical minerals and its end-to-end, ethical battery supply chain, Ontario offers perfect conditions for EV investments. Since 2020, Ontario has attracted almost $13 billion in EV and EV battery investments.
The VW Group has made battery technology a core element of its 10 Point Plan aimed at speeding up the company’s transformation. VVW set up PowerCo SE in Germany, a separate battery company, bundling the Group’s global battery business across the entire value chain – from raw material supply and development to the construction and operation of gigafactories.
Since its launch in July 2022, PowerCo SE has decided on the location of three cell factories in Salzgitter, Valencia and St Thomas in North America. By 2030, PowerCo and partners are expected to generate annual revenue of over 20 billion euros.