Volkswagen Group is investing in Canada’s battery cell factory to offset increasing labor costs within its global operations. The move gives the automaker an continental foothold in addition to the United States and Mexico, two of its primary markets. PowerCo, Volkswagen Group’s battery company, will manufacture lithium ion cells for automotive and commercial applications at the $420 million plant. Construction is slated to commence in early 2020 and expected to be completed by
The Volkswagen plant in St. Thomas, Ontario will become a major site for the production of battery cells beginning in 2027. PowerCo, a VW company that launched in July 2022, will handle the automaker’s global battery business including sourcing raw materials and manufacturing at the Canada location. The Canadian plant is expected to help diversify VW’s operations as they continue to face various issues with their diesel models.
VW Group is working to cut battery costs by 50% and build six new factories in Europe in order to achieve this goal. The Canada location, which will be VW’s third factory, will produce batteries for use in vehicles across North America. VW plans to invest $2 billion across the six European factories and expects the investment to create thousands of jobs.
Volkswagen Group is the largest automaker in the world. Headquartered in Wolfsburg, Germany, it employs over 500,000 people
Volkswagen believes that its aggressive expansion plans in North America are a sure sign of its commitment to the region. The company has recently announced plans to launch the U.S-focused Scout brand, increase the number of EV chargers in both the United States and Canada, and establish a offices in Seattle and Silicon Valley. These moves suggest that Volkswagen is investing heavily in its North American operations, and consumers can expect continued growth as the company expands its presence throughout the continent.
The Scout brand might not be well-known, but the 200,000 EVs it is capable of producing each year is sure to make a splash. The factory near Columbia will help VW cement its place as one of the leading players in the EV market.
Volkswagen has stated its intent to increase production of electric vehicles and to investing in plants in Mexico, in order to take advantage of lower-cost manufacturing. This announcement comes as the company faces increasing scrutiny for its diesel emissions scandal, which could impact sales of electric vehicles. However, by producing EVs in Mexico and other lower-cost areas, Volkswagen may be able to compete with other automakers who are also developing more environmentally friendly models.