VW Group’s PowerCo shrugs off tariffs, starts construction on $7-billion Ontario battery plant
Volkswagen Group has started construction on its Cdn $7-billion battery cell manufacturing plant in St. Thomas, Ont., barreling ahead with the megaproject despite global trade tensions and uncertain short-term prospects for North America’s electric-vehicle market.
The automaker’s battery unit PowerCo put ceremonial shovels in the ground at the site Oct. 28, several weeks after construction crews began laying formwork and rebar for the plant’s foundations.
PowerCo CEO Frank Blome said the “big milestone” keeps the company on course to become a battery powerhouse in Europe and North America.
“Electric vehicles are the future of the global automotive sector, and we’re proud to spearhead such a significant investment, while positioning Canada at the forefront of innovative EV battery production,” he said in a release.
The Canadian plant will become the third and largest in PowerCo’s portfolio, following launches in Germany and Spain. The start of construction was more than two years in the making. Top VW Group officials signed off on the greenfield site in the city midway between Toronto and Windsor in March 2023, following an intensive search.
Leading up to the start of construction in St. Thomas, PowerCo Canada in August awarded a pair of major construction packages to local contractors and launched a hiring blitz to begin bringing on hundreds of workers to staff the sprawling plant.
Tangible progress on the marquee investment, the largest in Canadian automotive history, supports the Canadian and Ontario governments’ strategies to build a local battery supply chain, as other EV and battery investments in the country founder.
Federal Minister of Industry Melanie Joly said the start of work on the plant marks an “important step in making Canada a world leader in the EV and battery industry.”
Vic Fedeli, Ontario minister of economic development, job creation and trade, said PowerCo bringing the project to life highlights the “resilience” of Ontario’s workforce and the strength of the province’s auto sector.
The industry has faced several significant setbacks in October, including the cancellation of the BrightDrop EV program at General Motors’ CAMI Assembly Plant in Ingersoll, Ont., and the indefinite delay of two battery materials projects planned for Quebec.
Despite growing uncertainty this year about the North American market for EVs and tense trade talks between Canada and the United States, VW Group has remained committed to its plans for St. Thomas. This spring, top company officials said the ramp-up timeline at the plant could face delays if EV sales do not pick up, but the start of battery production in Ontario is “fixed” for 2027.
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