VOLKSWAGEN GROUP STEPS UP ACTIVITIES IN NORTH AMERICA – Canada chosen as location for first overseas gigafactory of its battery company PowerCo SE

28 Mar, 2023

• First North American battery cell factory to be established in St. Thomas, Ontario
• PowerCo expansion is next step of ramping up global battery business while localizing cell production and setting up new value chain
• Growth strategy in North America: gigafactory Canada follows Scout decision last week to establish car plant in the United States
• 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.”

The Volkswagen Group steps up its activities in North America in a bid to take a strong position in this important growth market for battery electric vehicles. The Group and its battery company PowerCo have selected St. Thomas in Ontario, Canada to establish Volkswagen’s first overseas gigafactory for cell manufacturing, which will produce sustainable unified cells, start of production is planned for 2027. The decision to expand the PowerCo cell production ramp-up from Europe to Canada is further proof of the ambitious growth strategy of the Group in North America.
Oliver Blume, CEO Volkswagen Group: “Our North American strategy is a key priority in our 10-point-plan that we’ve laid out last year. 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: “Our gigafactory in Canada sends a strong message: 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. We are committed to be a reliable partner and good neighbor for the people in St. Thomas and Ontario.“

The Honourable François-Philippe Champagne, Canada’s Minister of Innovation, Science and Industry: “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. It is also a vote of confidence in Canada as the green supplier of choice to the world. With Volkswagen and PowerCo, our government looks forward to working together towards a cleaner, more sustainable and resilient economy.“

Ideal conditions for PowerCo’s first battery plant outside Europe

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.

Business Xpansion Journal

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