Volkswagen Group and its PowerCo battery company have chosen Canada for their first overseas battery cell factory.
The plant, located in St. Thomas, Ontario, will produce battery cells starting in 2027, according to the German automaker. PowerCo, a VW company launched in July 2022, will handle the automaker’s global battery business, including raw material sourcing, cell production and manufacturing at the Canada location.
The North American battery factory is part of VW Group’s broader global plan to cut battery costs in half. The automaker plans to build six factories in Europe. Construction has started on locations in Salzgitter, Germany, and Valencia, Spain. The Canada location will be the site of its third factory and its first in North America.
Volkswagen said the location is evidence of its “ambitious growth strategy” in North America. The company noted other expansion plans in the region, including the launch of the US-focused Scout brand. This more than doubles the number of EV chargers in the US and Canada through its Electrify subsidiary. America and software arm Cariad establishing offices in Seattle and Silicon Valley.
Earlier this month, VW spin-off Scout announced plans to build its $2 billion factory in South Carolina. Scout launched as a rugged electric vehicle brand aimed at American consumers. The factory, located near Columbia, will have the capacity to produce 200,000 electric vehicles a year. Production is scheduled to start at the end of 2026.
Volkswagen also noted that it has accelerated assembly of the all-electric ID.4 compact SUV in Chattanooga, Tennessee, and plans to upgrade its plants in Puebla and Silao, Mexico, for BEV assembly. The Mexico factory could also be used to produce BEV components such as electric motors in the second half of the decade, the company said.