Volkswagen Group's largest gigafactory will be built in Canada

Volkswagen Group's largest gigafactory will be built in Canada

In St. Thomas, Ontario, the unified cell will be produced from 2027, with an annual production capacity of up to 90 GWh; up to 3,000 jobs will be created and only CO2-free energy will be used.

The Volkswagen Group is consistently pursuing its strategy for electric mobility globally. One of the focuses is the North American region, where PowerCo SE - the Group's battery company - has announced the construction of its third gigafactory. The plant will be built in St. Thomas, Ontario, Canada, and when fully operational will have an annual production capacity of up to 90 GWh; the planned investment through 2030 is up to €4.8 billion, and the project has the potential to create up to 3,000 highly skilled jobs at the factory, plus tens of thousands more indirect jobs in the region.

The announcement was made in the presence of Canada's main institutions: the Prime Minister Justin Trudeau, and The Minister of Innovation, Science and Industry, François-Philippe Champagne, accompanied by Ontario’s Premier Doug Ford, Ontario's Minister of Economic Development, Job Creation and Trade, Victor Fedeli, and the Mayor of the City of St. Thomas, Joe Preston.

Canada's future

"When we talk about our 'made in Canada' plan, we are talking about creating good 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. This is what the new Volkswagen Group electric vehicle battery plant in St. Thomas, which will be the largest manufacturing plant in the country, will bring. It's a win for workers, for the community, and for the economy", commented Prime Minister Justin Trudeau. Thomas Schmall, Volkswagen Group Board Member for Technology, added: "North America plays a key role in our global battery strategy. The region will become the second pillar for PowerCo SE beside Europe, with batteries made in North America for North America. Gigafactory St. Thomas is an important milestone in our roadmap and 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 and sustainable mobility".


The importance of North America

St. Thomas will be the Volkswagen Group's first overseas gigafactory; battery cells for the Group's 100% electric vehicles in North America will be produced here. In particular, production will involve unified cells, the result of a new, state-of-the-art technology. Groundbreaking is scheduled to begin in 2024, while production is projected to start in 2027. The gigafactory is part of a larger plan that the Volkswagen Group and PowerCo agreed upon with the Canadian government in August 2022. The Memorandum of Understanding focuses on value creation through battery production and raw material supply security, with the goal of promoting electric mobility in the country.

This project is another piece of the Volkswagen Group's ambitious growth strategy in North America, which includes the introduction of the broadest portfolio of all-electric vehicles in the United States and Canada by 2030, the expansion of Electrify America's coast-to-coast charging network, and the start of operations of the iconic Scout brand, which will deliver its first full-electric vehicles in 2026.

Carbon neutral

"PowerCo was founded to make a difference in the battery business by offering cutting-edge cell technology and implementing sustainable manufacturing", said Frank Blome, CEO of PowerCo SE. The gigafactory will be built on an area of about 150 hectares, which corresponds to more than 210 soccer fields, and will be supplied with 100% CO2-free energy; the entire industrial and supplier park, on the other hand, will cover an area of 600 hectares. The location is strategic - 30 km south of London, Ontario, at the heart of the so-called Great Lakes Automotive Corridor and close to cities such as Toronto and Detroit - and will provide PowerCo with privileged access to the regional research and innovation cluster, talented workforce, good transport infrastructure and established supply chains.

Ontario is a leading global region for the automotive industry and has excellent potential to become a powerhouse in the electric vehicle field. Indeed, there are more than 700 automotive-related companies in this region, full access to critical minerals, and an ethical and comprehensive supply chain for batteries. Ontario, therefore, offers perfect conditions for the production of electric vehicles and batteries and has already raised investments of nearly 13 billion Canadian dollars (nearly 9 billion euros) since 2020. "Volkswagen Group's investment is the largest the automotive sector has ever made in our province", concluded Ontario’s Premier Doug Ford.

PowerCo SE's Strategy

Battery technology is a core element of the Volkswagen Group's '10-Point Plan' to accelerate the company’s transformation. PowerCo SE, established in Germany, is the Group’s company dedicated to the global battery business across brands; it covers the entire battery value chain, from raw material supply and technology development to the construction and operation of gigafactories.

Since its launch in July 2022, PowerCO SE has confirmed the construction of three gigafactories in Salzgitter, Valencia and St. Thomas. By 2030, PowerCO SE and partners are expected to generate annual revenue of more than 20 billion euros.

Source: Volkswagen Newsroom

VGI | Responsible OU: VP | Creation date: article date | Class 9.1

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