Volkswagen To Build Its Largest Battery Cell Factory … In Canada

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The battery division of Volkswagen Group, PowerCo SE, has picked the location to construct its biggest battery gigafactory to date — St. Thomas, Ontario, Canada. A potential final expansion stage could produce of up to 90 GWh of batteries annually. Actually, they already announced it last month. This was more of the formal announcement.

PowerCo SE says that up to 3,000 highly skilled jobs could be created at the factory as a result of the up to €4.8 billion ($7 billion) in planned investment that is expected to be made by 2030, in addition to tens of thousands more indirect jobs in the area.

Several of those in attendance spoke about the new gigafactory. Here is what some of them had to say:

Prime Minister Justin Trudeau: “When we talk about our made-in-Canada plan, we’re talking about creating good, middle-class jobs now and into the future, we’re talking about clean air for our kids and grandkids, and we’re talking about a strong economy that works for all Canadians. That’s what Volkswagen’s new electric vehicle battery plant in St. Thomas – the largest manufacturing plant in the country once built — is all about. It’s a win for workers, for the community, and for the economy.”

Thomas Schmall, Volkswagen Group Board Member for Technology: “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. Gigafactory St. Thomas is an important milestone in our roadmap.”

The company’s first overseas gigafactory for cell production will be located in St. Thomas, and it will provide the company’s BEVs in the North American region with their unified cells technology, a cell technology created for mass production. Construction is expected to start in 2024 and be completed in 2027.

In August of last year, Volkswagen and PowerCo reached an agreement with the Canadian government — led by Prime Minister Justin Trudeau — on a larger plan, which includes the cell factory. For the purpose of advancing e-mobility in the nation, the Memorandum of Understanding (MoU) signed at the time focuses on the creation of value for batteries and the security of raw materials.

The choice to extend PowerCo SE’s cell production network to Canada is more evidence of the Volkswagen Group’s growth plan for the North American market. This includes introducing the largest selection of fully electric vehicles in the United States and Canada by 2030, expanding Electrify America’s coast-to-coast charging network in the United States and Canada, and announcing that the iconic Scout brand will start producing its first all-electric vehicles in 2026.

Here are a few more statements from the attendees:

Frank Blome, CEO of PowerCo SE: “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.”

François-Philippe Champagne, Canada’s Minister of Innovation, Science and Industry: “Today’s announcement is a true testament to our highly skilled workforce and Canada’s strong and growing battery ecosystem. VW’s decision to establish its first overseas gigafactory in Canada speaks to our country’s competitiveness when it comes to attracting major investments. 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 gigafactory is going to be very large, around 370 acres (150 hectares), or more than 210 soccer or football fields! That’s how much land is being used to construct the cell factory. (Yeah, that’s big!)  A total of 1,500 acres (600 hectares) make up the industrial and supplier park. Its location is about 30 kilometers south of London, Ontario, and is fairly close to important cities like Toronto and Detroit. It is basically at the center of the Great Lakes Automotive Corridor.

This is probably the best strategic location for PowerCo, and it gives the company access to the area’s research and innovation hub, skilled workforce, good transportation infrastructure, and established supply chains. Additionally, the energy used to power the cell plant will be entirely CO2-free. But there’s no mention of the energy resources that will be used.

Ontario is already a leader in the worldwide automotive industry. With its end-to-end ethical battery supply chain, more than 700 automotive-related companies, complete access to critical minerals, and ideal EV investment conditions, since 2020, almost CAD$13 billion worth of investments in EVs and EV batteries have come to Ontario.

At this point, I thought all of them had spoken, but here are a some more statements from the attendees;

Doug Ford, Premier of Ontario: “This investment, the largest auto investment in our province’s history, is a big win for Ontario, the people of St. Thomas and surrounding areas. We’re thrilled to welcome Volkswagen and PowerCo SE to Ontario and thank them for their tremendous confidence in our province, our workers and our growing electric vehicle supply chain. Welcome to Team Ontario, Volkswagen!”

Vic Fedeli, Ontario’s Minister of Economic Development, Job Creation and Trade: “Last October, we met with Volkswagen in Germany to discuss the possibility of a new EV battery manufacturing facility. Six months later, we’re proud to say this potential will become a reality. Volkswagen’s historic investment will strengthen our end-to-end electric vehicle supply chain and create more good-paying jobs for workers in St. Thomas and across the province. Our government continues to create the right conditions for businesses and workers to succeed now and in the future. Thank you, Volkswagen, for choosing Ontario.”

Battery technology is a key component of Volkswagen Group’s 10 Point Plan, which seeks to accelerate the company’s development of EVs. In order to consolidate the group’s global battery business across the whole value chain, from raw material supply and development to the construction and management of gigafactories, Volkswagen established PowerCo SE in Germany. PowerCo SE has chosen the locations of three cell factories in North America, including Salzgitter, Valencia, and St. Thomas, since its founding in July 2022. Over 20 billion euros in yearly earnings are anticipated from PowerCo and partners by the year 2030.

Canada provides ideal circumstances, including local raw material supply and widespread access to clean electricity. It’s all about location, and PowerCo has chosen one that will fit its needs.

Source: Volkswagen Group