Volkswagen Group plans to construct its first North American battery cell manufacturing plant in St. Thomas, Ont., because the automaker establishes a regional provide chain to construct electrical autos for Canada, the U.S. and Mexico.

The corporate and its in-house battery subsidiary PowerCo on Monday introduced the landmark funding within the southwestern Ontario metropolis halfway between Toronto and Windsor.

Monetary particulars weren’t instantly out there.

Volkswagen mentioned the plant is scheduled to start producing battery cells in 2027. It shared few different specifics. The worth of the funding and additional particulars about manufacturing capability are anticipated to be introduced at an occasion in St. Thomas within the coming months.

Thomas Schmall, Volkswagen’s know-how chief in addition to chair of the PowerCo board, mentioned the funding will drive the automaker’s battery technique ahead “at full pace.”  

“Our gigafactory in Canada sends a robust message: PowerCo is on observe to turn into a worldwide battery participant,” he mentioned in a launch.

Regardless of stiff competitors, Canada has for months gave the impression to be the frontrunner for Volkswagen’s inaugural battery cell web site.

In August, the corporate signed a memorandum of understanding with the Canadian authorities to cooperate on constructing a provide chain for battery-electric autos. And in December, the automaker singled out Canada as “one logical choice” for the plant, although it cautioned different international locations had been additionally being thought-about.

The location for the brand new plant in St. Thomas is ebook ended by two railway strains, and has robust freeway and utility hyperlinks, in line with the St. Thomas Financial Improvement Corp., which has spent about two years assembling the greenfield improvement web site.

The 1,500-acre plot of land sits on the northeastern fringe of town, and till March 2 was partially a part of the neighboring municipality of Central Elgin. Provincial laws redrew the borders across the metropolis earlier this month, placing all the web site inside St. Thomas.

Vic Fedeli, the province’s minister of financial improvement, job creation and commerce, informed Automotive Information Canada in early March that placing the megasite underneath one native authorities was the ultimate element wanted to “lure” the following massive investor to the province.

At 1,500 acres, the positioning is giant even in comparison with different sprawling automotive campuses in Canada.

Toyota Motor Manufacturing Canada Inc.’s advanced in Woodstock, Ont., as an illustration, is roughly 1,000 acres. In Alliston, Ont., Honda of Canada Mfg.’s three-plant campus sits on 890 acres. The not too long ago introduced Nextstar Vitality Inc. battery plant being inbuilt Windsor, Ont., will occupy a 220-acre plot.

Fedeli mentioned March 13 that all the web site in St. Thomas “is meant for Volkswagen.”

A full accounting of the funding, in addition to attainable authorities backing for the venture might be introduced on the upcoming occasion in St. Thomas, he added. 

The most recent EV battery provide chain funding in Canada comes as Volkswagen corporations up its North American EV priorities.

The German automaker introduced plans to construct a $2 billion meeting plant in Blythewood, S.C., on March 3. The power will assemble battery-electric SUVs and pickups for Volkswagen’s new Scout Motors model.

Volkswagen already builds the ID4 electrical crossover at its advanced in Chattanooga, Tenn. Different fashions, together with an Atlas-sized crossover, are anticipated to be produced on the plant within the coming years.

The corporate mentioned Canada gives the “perfect circumstances” to help Volkswagen’s North American electrification plans. It pointed to native provides of uncooked supplies and large entry to wash electrical energy as two of the important thing rationales for citing the plant in St. Thomas.

Larry P. Vellequette contributed to this report.