Volkswagen has announced its first North American battery cell factory to be established in St. Thomas, Ontario.

Oliver Blume, chief executive officer, Volkswagen Group said, “With the decisions for cell production in Canada and a Scout site in South Carolina we’re fast-forwarding the execution of our North American strategy.”

The Group and its battery company, PowerCo, selected St. Thomas in Ontario, Canada to establish Volkswagen’s first overseas gigafactory for cell manufacturing, which will produce sustainable unified cells. The start of production is planned for 2027.

“PowerCo is on track to become a global battery player. With the expansion to North America, we will enter a key market for e-mobility and battery cell production, driving forward our global battery strategy at full speed. Canada and Ontario are perfect partners for scaling up our battery business and green economy jobs, as we share the same values of sustainability, responsibility and cooperation,” said Thomas Schmall, board member for technology of Volkswagen AG and chair of the supervisory board of PowerCo SE.

The Hon. François-Philippe Champagne, Canada’s Minister of Innovation, Science and Industry said, “Today’s announcement by Volkswagen 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.”

According to a press release from Volkswagen, PowerCo is to become a key player in the development of the battery value stream in North America with Canada offering ideal conditions, including the local supply of raw materials and wide access to clean electricity.

With the electrification of the iconic Scout brand the Group will enter the highly attractive truck and rugged SUVs segments. Scout vehicles are being designed and developed from the ground up on a new all-electric platform that emphasizes off-road capability.

Scout Motors is backed by the Volkswagen Group and operates as an independent unit within the Group.

The Volkswagen announcement said South Carolina is an established leader in the U.S. automotive industry with over 500 automotive-related companies and 75,000 automotive industry employees.

Volkswagen's software and technology company CARIAD established a technology hub in the United States at the start of 2023. Specifically, the team of over 200 software engineers and developers based in the greater Seattle area and Silicon Valley is working on Volkswagen’s Automotive Cloud that will connect the next generations of vehicles from all Group brands like Volkswagen, Audi and Porsche as well as next-generation software in the automated driving and digital experience space. CARIAD is also becoming part of the U.S. digital ecosystem.

Volkswagen Group is also driving the expansion of Electrify America, with a coast-to-coast charging network in the U.S. and Canada with 800 stations/3,500 DC fast chargers powered by 100 percent renewable energy with a "boost plan" to more than doubling this number by 2026.

“Whether it’s investing in clean steel or unlocking the economic potential of our critical minerals, our government is on a mission to create the right conditions for businesses and workers to succeed as we build the economy of the future,” said the Hon. Vic Fedeli, Ontario’s minister of economic development.

Frank Blome, chief executive officer, PowerCo SE said, “PowerCo is all set to introduce key strategic assets such as the unified cell and the standardized cell factory to Canada and the larger North American market. We are dedicated to build up regional and therefore robust, transparent and sustainable supply chains.”

According to the Verge, by establishing a battery plant in North America, Volkswagen hopes to meet a major requirement to enable its electric vehicles to be eligible for the U.S. federal tax credit of $7,500.

Photo courtesy of Volkswagen.