Volkswagen will Build its Next Battery Facility in St. Thomas, Ontario

• This location is about midway between Toronto and Windsor.

• The batteries made there will be used in EVs built in Tennessee and South Carolina.

• Production should begin in 2027.

Volkswagen has now confirmed its upcoming North American battery factory will be built in St. Thomas, Ontario.

The province was the front-runner for a while in VW’s project but the company has now officialized its choice, citing favourable conditions such as access to clean energy and a supply of raw minerals.

The specifics of the future plant have not yet been announced, but its production capacity could be substantial since it will be built on a 1,500-acre lot which is served by two railway lines and nearby highways.

As a comparison, Toyota’s Woodstock, Ont. production facility which makes the RAV4 is sat on a 1,000-acre piece of land, and Honda’s three assembly plants in Alliston, Ont. only occupy 890 acres.

This capacity should be used to supply batteries to electric vehicles manufactured in the automaker’s Chattanooga, Tennessee facility which currently builds the ID.4, as well as in a new plant in South Carolina that will make Scout-branded models.

Building batteries in Canada will allow Volkswagen and Scout vehicles made in the United States to qualify for U.S. tax credits under the Inflation Reduction Act, since both countries have a free-trade agreement.

Since financial details have not yet been disclosed, we don’t know what the incentive package put forward by the federal and provincial governments includes, but it is likely to have had an impact on the automaker’s decision to set up its operations in St. Thomas rather than in the U.S or Mexico.

These details are expected in the coming months and they should be announced in an event held close to the future plant.

Interestingly, this will not be the first automotive assembly plant to choose St. Thomas as its home, since Ford operated a facility there from 1967 to 2011 where it last produced the Ford Crown Victoria, Mercury Grand Marquis, and Lincoln Town Car.

Source: Automotive News Canada