Volkswagen’s First North American Battery Plant Will Be Canadian

Matt Posky
by Matt Posky

Following news that Volkswagen was far more enthusiastic about establishing battery plants in North America than in Europe, we have confirmation on the location of the automaker’s next cell manufacturing facility. It will be located in St. Thomas, Ontario. Despite scattered assumptions that VW’s recent praise of the Biden administration’s EV incentive scheme would signal another factory based in the United States, setting up shop in Ontario should still satisfy regional supply chain needs to manufacture electric cars under the provisions outlined in the USMCA.


Though Canada never appeared to be out of the running, suggesting that VW may have been lauding subsidies outlined in the so-called Inflation Reduction Act (IRA) just to negotiate more favorable terms inside of Europe. The automaker had signed a memorandum of understanding with the Canadian government to build a battery plant last summer and had confirmed its feelings had not changed going into 2023.


Earlier promises that Volkswagen would build a $2-billion EV assembly plant in Blythewood, South Carolina, likely means the Canadian facility will serve as its regional battery supplier. The plant is said to be responsible for battery electric crossovers and pickups under VW’s new Scout Motors brand. Canadian batteries may also eventually make their way to VW’s plant in Chattanooga, Tennessee, which builds the ID.4 crossover and is poised to deliver an even bigger all-electric model to potentially supplant the Atlas.


Since these vehicles will likely be using Canadian batteries, they should all qualify for IRA subsidies inside the United States.


Earlier in the month, Automotive News reported that Vic Fedeli, Ontario’s minister of economic development, job creation and trade, said that redistricting the Canadian worksite was the final component needed to “lure” big investors back to the province.


From Automotive News:


The site for the new plant in St. Thomas is book ended by two railway lines, and has strong highway and utility links, according to the St. Thomas Economic Development Corp., which has spent about two years assembling the greenfield development site.
The 1,500-acre plot of land sits at the northeastern edge of the city, and until March 2 was partially part of the neighboring municipality of Central Elgin. Provincial legislation redrew the borders around the city earlier this month, putting the entire site within St. Thomas.


Though the area’s status as a shipping hub and Canada having access to the relevant minerals (e.g. lithium, nickel, and cobalt) undoubtedly play just as important of a role. The same could be said for the nation’s multi-billion dollar green technology fund that’s designed to convince companies using the preferred environmental jargon to invest.


"This is a home run for Canada ... when you have a home run like that, you have to celebrate and say, 'Yes, we won'," Canadian federal Innovation Minister Francois-Philippe Champagne told reporters on Monday – adding that this would represent the largest single investment by the automotive sector in Canadian history.


We’ll have to see how true that turns out to be once VW has shared all the details. As of now, we only know that the company has settled on a location and that the Canadian government seems incredibly happy with that decision.


[Image: HJBC]

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Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • YellowDuck YellowDuck on Mar 14, 2023

    The St. Thomas site might be "bookended by two rail lines", but unfortunately one of them is haunted by the ghost of a rather large elephant...

  • Arthur Dailey Arthur Dailey on Mar 14, 2023

    The St Thomas Ford facility is now an Amazon distribution centre. So VW will not be going there. However there are literally hundreds (well over a thousand) experienced production workers from the auto, locomotive and other industries located in and around St Thomas who could be willing to return to that industry sector. What not one media source that I have read/seen/listened to has mentioned is VW's previous failed manufacturing venture in Ontario. VW set up shop in Barrie Ontario in the 1980's. Eventually that facility supplied VW's global requirement for alloy wheels. It lasted as a VW facility for approximately a decade and is now a 'self-storage' building.

    • SCE to AUX SCE to AUX on Mar 15, 2023

      My first car - an early 1971 Pinto - was built at the St Thomas Ford plant. Kind of sad that it's an Amazon DC now, but at least the building is in use.

  • Lorenzo Subaru had the ideal wagon - in 1995. The Legacy Outback was a straight two-box design with rear quarter and back windows you could see out of, and was available in brown with a 5-speed manual, as God and TTAC commenters intended. It's nice they're not raising prices, but when you've lost the plot, does it matter?
  • Bkojote Remember a month a go when Cleveland wanted to create a more walkable Cleveland and TTAC's 'BIG GOVERNMENT IS THE PROBLEM' dumbest and dullest all collectively crapped their diapers? Here's the thing- look on any American highway and it's littered with people who don't /want/ to be driving or shouldn't be. Look at every Becky on her phone during the morning commute in her Tucson, look at every Brad aggro driving his 84 month loan GMC. Hell look how many drivers nowadays can't even operate a headlight switch. You expect these people to understand a stoplight? In my neighborhood alone 4 people have been rear ended at lights from someone on their phone. Distracted driving over the past 10 years has spiked, and it's only going to get worse unless Becky has an alternative, because no judge is going to pull her license when 'she needs it to get to work!' but heaven forbid she not check fb/tiktok for 40 minutes a day.
  • Scott Shouldn't the The Italian Minister for Business be criticizing The Milano for being too ugly to be Italian?Better use of resources doing that....
  • Steve Biro Frankly, while I can do without Eyesight and automatic start-stop, there is generally less B-S with Subarus in terms of design, utility and off-road chops than with many other brands. I just hope that when they adopt Toyota’s hybrid system, they’ll also use Toyota’s eCVT.
  • The Oracle These are all over the roads in droves here in WNC. Rarely see one on the side of the road, they are wildly popular, capable, and reliable. There is a market for utilitarian vehicles.
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