German automotive giant Volkswagen (VLKAF) has selected St. Thomas, Ontario as the site of its new electric vehicle battery plant.
The cost of the battery plant has not been disclosed, but production is expected to begin in 2027.
In a news release, Volkswagen said that the Ontario site will be the first overseas cell manufacturing plant for its wholly owned battery company called PowerCo.
Volkswagen added that the St. Thomas facility will play a key role in its North American expansion strategy, and efforts to compete in the fast-growing electric vehicle space.
Volkswagen signed an agreement late last year with the federal government in Ottawa to search for a battery factory site in Canada.
At that time, Volkswagen said Canada provides the ideal conditions for battery manufacturing, including an ample supply of raw materials and access to clean electricity, notably hydropower.
The federal government and provinces are aggressively trying to attract foreign automakers as the transition to electric vehicles speeds up, touting Canada’s supply of raw materials and affordable power sources.
Volkswagen’s stock has declined 16% over the last 12 months to trade at 125.56 Euros (Cdn$184.82) per share.
