Volkswagen Group to establish its first overseas gigafactory for cell manufacturing in Canada.

In a move to establish a strong presence in the growing battery electric vehicle market in North America, Volkswagen Group and its battery company PowerCo have announced plans to build the automaker’s first overseas gigafactory for cell manufacturing in St. Thomas, Ontario, Canada. The factory will produce sustainable unified cells and is expected to start production in 2027.

The decision to expand the PowerCo cell production ramp-up to Canada is a significant step for Volkswagen as it seeks to expand its battery production capacity and further its growth strategy in North America. The St. Thomas gigafactory is expected to provide a significant boost to the Canadian economy, with the potential to create thousands of new jobs in the region.

According to a statement released by the Volkswagen Group, the decision to establish the gigafactory in Canada was based on several factors, including the country’s strong industrial and technology base, supportive government policies, and access to a highly skilled workforce.

The announcement of the new gigafactory comes as the demand for electric vehicles continues to grow, with many countries and regions, including Canada, implementing measures to reduce their carbon footprint and transition to cleaner energy sources. Volkswagen has set an ambitious goal of becoming carbon neutral by 2050 and has pledged to invest billions of dollars in electric vehicles and renewable energy technologies.

The establishment of the new gigafactory in Canada will enable Volkswagen to expand its presence in the North American market, which is expected to see significant growth in the coming years. With the company’s existing plants in the United States and Mexico, the new gigafactory in Canada will help Volkswagen to strengthen its position in the region and establish a strong foothold in the rapidly expanding electric vehicle market.

This will be the third Volkswagen plant worldwide and PowerCo’s first cell factory in North America, following the Salzgitter and Valencia plants. The new factory will equip the Group’s BEVs in the region with advanced battery cells and is part of a larger plan that Volkswagen and PowerCo agreed upon with the Canadian government in August 2022, focused on promoting e-mobility in the country and enhancing battery value creation and raw material security.

Canada provides ideal conditions for PowerCo to become a key player in the battery value stream in North America, including local access to raw materials and clean electricity. The establishment of the St. Thomas gigafactory will further strengthen PowerCo’s position in the region and enhance its growth strategy. More information on the gigafactory and its operations will be revealed in the near future.

The Volkswagen Group is making significant strides towards introducing the widest range of full-electric vehicles in the United States. The Group’s brands are aiming to launch over 25 new BEV models by 2030. Additionally, Volkswagen plans to maximize the region’s potential by creating more synergies and utilizing the innovative strength, technical expertise, production capacities, supply chains, and market knowledge of all its brands across Canada, the United States, and Mexico.

Volkswagen intends to expand its manufacturing capabilities and expertise in the region. In addition to its increased production of the all-electric ID.4 compact SUV in Chattanooga, Tennessee, the company also plans to modernize its plants in Puebla and Silao, Mexico, for the assembly of BEVs, as well as potentially producing BEV components like electric motors in the second half of the decade.

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