Volkswagen to build electric vehicle battery plant in southwestern Ontario

Ontario’s electric vehicle industry is getting another jolt as Volkswagen builds an EV battery factory in St. Thomas, south of London — bringing auto jobs back to an area that lost a Ford assembly plant to closure a decade ago.

Europe’s largest automaker said Monday that its PowerCo subsidiary’s plant will be the company’s first overseas facility making batteries for EVs.

Volkswagen — whose recent television ads tout that it’s building “EVWs” as the auto industry shifts from internal combustion engines — did not reveal how many jobs will be created, but Ontario Economic Development Minister Vic Fedeli said “it will be huge employment for all the communities within Elgin County.”

More details on the number of jobs, federal and provincial government financial incentives and timing for building and beginning production at the plant on a 1,500-acre site will be announced in the coming weeks, Fedeli told reporters at Queen’s Park.

“This is land that the province has been accumulating,” he added, noting components suppliers will be needed for the new plant.

“Our move is now to look for as many companies as possible to make those parts, hopefully here in Ontario.”

It was also not immediately clear where the VW batteries will be shipped, given that the automaker does not have a vehicle assembly plant in Ontario, although it does make vehicles in Mexico and the United States.

The site itself is larger than the land upon which Chrysler parent company Stellantis is using — with hefty federal and provincial cash injections — for an EV battery plant announced in Windsor last March. It will employ 2,500 once it hits full production in two years and cover an area the size of 112 National Hockey League rinks.

“We are an EV powerhouse,” said a grinning Fedeli, who last year was part of the announcement that General Motors will build electric delivery vehicles at its retooled factory in Ingersoll, along Highway 401 just north of St. Thomas.

The $5-billion plant in Windsor was hailed by industry observers as a turnaround moment for the province, which to that point seemed on the sidelines of the shift to EVs despite huge reserves of minerals like cobalt — which is needed to make batteries — in northwestern Ontario’s Ring of Fire.

In a joint statement with federal Innovation, Science and Industry Minister Francois-Phillipe Champagne, Fedeli said the new VW plant is “a major vote of confidence in Canada and Ontario.”

“This investment is another significant step as we build a clean transportation sector to meet global and North American demand for zero-emission vehicles,” the two ministers added.

Ford, General Motors, Stellantis, Honda and Toyota are the only manufacturers to assemble vehicles in Ontario.

Asked if the new battery factory could help lure a VW plant to the province, Fedeli said “just keep watching … we have a tremendous amount of work in the pipeline.”

The first meeting with VW on the battery plant took place last April 27 with the company’s North American board of directors. Developments moved quickly from there, according to a timeline released by the Ontario government.

Fedeli and an Ontario delegation travelled to Germany last October on a trade mission, had a meeting with senior company officials and got a tour of facilities there.

“We stood on the roof of a Volkswagen building, looking over their gigafactory that was just being started, and that’s what they said is what we could expect it to look like in Ontario,” said Fedeli.

“And then three weeks later, they came to London, and we toured the site by helicopter. A month later was their very first meeting with the premier.”

There were four such meetings with Premier Doug Ford in Toronto, the last on Feb. 23.

“He’s the closer,” said Fedeli.

While Ontario has been criticized for scrapping incentives for EV buyers, Fedeli said the money is “better invested” luring manufacturers and saving auto industry jobs that would otherwise disappear as production moves away from piston-engine vehicles.

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