On Dec. 1, 2022, the Volkswagen Group got here tantalizingly near naming Canada as house to the automaker’s first North American battery cell plant.

CEO Oliver Blume stopped wanting singling out the nation as the one place Volkswagen was contemplating however mentioned Canada is “a logical choice.”

His feedback got here because the automaker agreed to work with the federal authorities to determine websites for a deliberate battery cell plant for VW subsidiary PowerCo.

If Ottawa can shut out the deal, it could probably be the Canadian auto business’s largest coup for the reason that arrival of Honda and Toyota within the Nineteen Eighties.

Within the spring of 2022, Stellantis introduced plans to construct a $5-billion cell manufacturing unit in Windsor, Ont., with LG Vitality Answer. However not like the Chrysler, Dodge, Jeep and Ram guardian firm, which has operated in Ontario for many years, Volkswagen can be a brand new addition to Canada’s manufacturing sector.

The automaker has supplied few different particulars on its search however mentioned PowerCo has a brief checklist and can enter negotiations “within the close to future” to determine essentially the most aggressive web site.

The method will put Canada’s two largest provinces in competitors.

Ontario already has the meeting operations of 5 automakers and a prolonged checklist of elements suppliers. However latest battery supply-chain exercise in Quebec, plus the province’s shops of hydro-electric energy, makes it a contender.

In reality, Thomas Schmall, VW’s expertise chief, named “ample portions of power from renewable sources and aggressive monetary situations” as among the many key inputs that PowerCo is contemplating. On these metrics, Quebec holds an edge. Its electrical energy grid runs nearly totally hydroelectric. For big prospects, that energy can be the most affordable of any main market in Canada or america — $5.33 cents per kilowatt-hour within the Montreal space as of April, in accordance with a HydroQuebec report.

Ontario’s grid can be terribly clear by international requirements, producing 94 per cent of its energy emissions-free, in accordance with the provincial authorities. That comes primarily by a mix of nuclear and hydro.

However the position of gas-fired era has risen lately, and in October, Ontario’s grid operator referred to as for the province to put money into natural-gas crops to satisfy nearterm provide constraints.

Prices are additionally increased. Giant industrial prospects within the Toronto space have been paying $9.76 cents per kWh as of April, in accordance with the identical Hydro-Quebec report.

Then again, Ontario has its nostril forward with regards to proximity to Volkswagen’s nearest meeting operation. A plant within the province’s automotive heartland can be about 700 kilometres nearer to supplying VW’s plant in Chattanooga, Tenn., than one positioned, for instance, within the Montreal space.

A call might come sooner slightly than later, with some business observers predicting an announcement someday over the subsequent six months.