Volkswagen Group chooses Canada as location for PowerCo SE first overseas gigafactory

The Volkswagen Group has stepped up its activities in North America, selecting St. Thomas in Ontario, Canada, for the location of PowerCo SE’s first overseas gigafactory for cell manufacturing.
Volkswagen Group chooses Canada as location for PowerCo SE first overseas gigafactory
Courtesy of Volkswagen.

The Volkswagen Group and its battery company PowerCo SE are aiming to take a strong position in the important North American growth market for battery electric vehicles. Start of production for the new gigafactory, which will produce sustainable unified cells, is scheduled for 2027.

“Our North American strategy is a key priority in our 10- point-plan that we’ve laid out last year” said Oliver Blume, CEO Volkswagen Group. “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.”

Thomas Schmall, Board Member for Technology of Volkswagen AG and Chairman of the Supervisory Board of PowerCo SE, said that the gigafactory in Canada sends a strong message that PowerCo is on track to become a global battery player and that with the expansion to North America, the company will enter a key market for e-mobility and battery cell production, driving forward its global battery strategy at full speed.  

The PowerCo decision to locate its next plant in St. Thomas in Ontario/Canada is a further milestone in the global roll-out of its battery strategy. After Salzgitter and Valencia, this will be the third Group- owned plant worldwide and PowerCo’s first cell factory in North America. It will equip the Group brand’s BEVs in the region with cutting-edge battery cells ‒ and is part of a larger plan that Volkswagen and PowerCo agreed upon with Canadian Prime Minister Justin Trudeau's government in August last year. The Memorandum of Understanding signed back then focusses on battery value creation and raw material security in order to promote e-mobility in the country.

While PowerCo is to become a key player in the development of the battery value stream in North America, Canada offers ideal conditions, including the local supply of raw materials and wide access to clean electricity. More details on gigafactory St. Thomas will be revealed in the near future.

The Volkswagen Group is driving forward the introduction of the broadest portfolio of full-electric vehicles in the United States. Group brands plan to introduce more than 25 new BEV models through 2030. In addition, the Group plans to fully leverage the region's power by creating more synergies and making even better use of the innovative strength, technical expertise, production capacities, supply chains and market knowledge of all brands in Canada, the United States, and Mexico.

Volkswagen will therefore continue to bring more manufacturing capabilities and know-how to the region. In addition to its ramped-up assembly of the all-electric ID.4 compact SUV in Chattanooga, Tennessee, Volkswagen also has plans to upgrade the plants in Puebla and Silao, Mexico, for the assembly of BEVs and potentially for BEV components such as electric motors in the second half of the decade.

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.

South Carolina is an established leader in the US automotive industry with over 500 automotive- related companies and 75,000 automotive industry employees. The state is No. 1 in the US for export sales of both completed passenger vehicles and tires. More than 200,000 Scout vehicles are expected to roll off the Columbia, South Carolina production line each year. Production is scheduled to begin by the end of 2026.

To bring the US-specific digital customer experience to the next level and utilise the US’s leading position in technology and software innovation, Volkswagen's software and technology company CARIAD has established a technology hub in the US at the beginning 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 US digital ecosystem, partnering with tech players from the US like Microsoft for backend and cloud technologies or Qualcomm for high-performance hardware to increase its speed of innovation and development.

Volkswagen Group is also driving the expansion of Electrify America, with a coast-to-coast charging network in the US 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.

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