Volkswagen opens first North American battery plant for electric vehicles in St. Thomas, Ontario.
The Ontario government has announced plans to build a Volkswagen electric vehicle (EV) battery manufacturing facility in St. Thomas on the Talbot Line off Yarmouth Center Road near the city’s airport.
The announcement, released Monday by the office of Vic Fedeli, the province’s minister for economic development and trade, is the first public confirmation of the deal, which has long been rumored to be in the works.
The company said production is set to begin in 2027, calling it its first overseas “Gigafactory” for battery cell manufacturing.
“I think that means a very big plant with a very big workforce,” St. Thomas Mayor Joe Preston said Monday. “We’re already clearing the land and getting things ready as fast as any construction we can do.”
Preston said the facility is likely to result in thousands of jobs, at the facility itself, along the supply chain and during the facility’s construction, which is expected to take two to four years.
“In the long term, it may be more than we can dream of. It’s so good for St. Thomas.”
Flavio Volpe, head of the Automotive Parts Manufacturers’ Association (APMA), said the new plant could result in “up to 2,500 direct jobs created and up to 7,500 total jobs including indirect jobs”.
The province recently passed legislation that would allow the City of St Thomas to annex 607 acres of farmland from the Central Elgin township. The goal is to convert the parcel to industrial land as part of what the province calls an investment “mega-site.”
Neighbors were upset with the legislation, which they believed was being carried out in secret and without their consultation.
Preston said it is typical for governments to keep real estate deals confidential until they are a fait accompli.
“Obviously, any negotiations regarding the purchase of real estate or land must be conducted in silence. We’re certainly not putting up billboards about it,” he said.
Volkswagen officials met with Premier Doug Ford on Feb. 23 to seal the deal, according to a provincial press release.
Once the batteries are factory built, they would be manufactured by PowerCo, a subsidiary of Volkswagen, in their first overseas battery factory.
“A vote of confidence” in Ontario manufacturing
Brendan Sweeney is Executive Director of the Trillium Network for Advanced Manufacing at Western University in London, Ontario.
Sweeney said the new EV battery manufacturing facility is “really a vote of confidence in Ontario as a manufacturing location and Southwestern Ontario in particular, especially given that this is not an established manufacturer making a new investment – this is a manufacturer which is fairly new to Canada.”
Sweeney said at least three other EV manufacturing facilities in North America are likely to be served by the time the plant is built, including a yet-to-be-built EV plant in the Carolinas and an unannounced Audi plant whose location has yet to be determined.
Given that, Sweeney said the plant could be as big, if not bigger, than the recently announced Stellantis EV battery plant in Windsor, which will employ 2,500 people.
“It could be this big or bigger,” he said. “It’s very exciting.”
Sweeney said the announcement means St. Thomas is likely to see big growth in the form of new homes and more suppliers to supply the new plant.
He said part of the reason Volkswagen may have chosen the St Thomas site is due to recent layoffs at CAMI’s assembly plant in Ingersoll and Brose’s auto parts plant in London, as well as the recent closure of Johnson Controls International’s plant in Tilsonburg.
“That’s probably one of the reasons for that, in a weird way [Volkswagen EV] Plant ended up where it did. There are workers who know the auto industry very well.
“Those layoffs in such a tight job market might have made Volkswagen say, ‘Oh, there are people available,'” Sweeney said. “The quality of the workforce in the region is probably a big advantage.”
Provincial officials and Volkswagen company officials were not immediately available for comment Monday.
