Volkswagen Group has confirmed earlier reports that its first North American battery cell factory will be established in St. Thomas, Ontario, Canada.

The gigafactory Canada decision follows the Scout brand decision last week to establish a car plant in the US.

It is planned that the Canada gigafactory plant will produce sustainable unified cells with the start of production slated for 2027. The decision to expand the PowerCo cell production ramp-up from Europe to Canada is further proof of the ambitious growth strategy of the Group in North America, the company says.

Oliver Blume, CEO Volkswagen Group said: “Our North American strategy is a key priority in our 10-point-plan that we’ve laid out last year. With the decisions for cell production in Canada and a Scout site in South Carolina we’re fast-forwarding the execution of our North American strategy.”

VW says PowerCo is on track to become a global battery player and that the PowerCo decision to locate its next plant in St. Thomas in Ontario and Canada is a further milestone in the global roll-out of its battery strategy. After Salzgitter and Valencia, this will be the third VW Group- owned plant worldwide and PowerCo’s first cell factory in North America.

VW maintains the Canadian battrey plant will equip the group brands’ BEVs in the region with ‘cutting-edge battery cells ‒ and is part of a larger plan that Volkswagen and PowerCo agreed upon with Canadian Prime Minister Justin Trudeau’s government in August last year’. The Memorandum of Understanding signed back then focuses on battery value creation and raw material security in order to promote e-mobility in the country.

VW says Canada offers ideal conditions for EV battery supply chains, including the local supply of raw materials and wide access to clean electricity. More details on gigafactory St. Thomas will be revealed in the near future.

Arno Antlitz, CFO & COO Volkswagen Group said: “We now have the unique opportunity to grow profitably in North America and play a key role in driving the transition to electric mobility there. Both new, major projects are integral building blocks of our ambitious growth program for the entire region. We will be able to address an even broader range of customers. Volkswagen has the right strategy, products and scale to take a strong position in the North American market.“

The Volkswagen Group is planning a broad portfolio of fullly electric vehicles in the United States. The group brands plan to introduce more than 25 new BEV models through 2030. In addition, the VW Group says it plans to fully leverage the region’s power by creating more synergies and making even better use of the innovative strength, technical expertise, production capacities, supply chains and market knowledge of all brands in Canada, the United States, and Mexico.

In addition to its ramped-up assembly of the all-electric ID.4 compact SUV in Chattanooga, Tennessee, Volkswagen also has plans to upgrade the plants in Puebla and Silao, Mexico, for the assembly of BEVs and potentially for BEV components such as electric motors in the second half of the decade.

Scout brand

With the electrification of the Scout brand the VW Group says it will enter the ‘highly attractive truck and rugged SUVs segments’. VW’s Scout vehicles are being designed and developed from the ground up on a new all-electric platform that emphasizes off-road capability, the company claims. Scout Motors is backed by the Volkswagen Group and operates as an independent unit within the VW Group.

VW says more than 200,000 Scout vehicles are expected to roll off the Columbia, South Carolina production line each year with production scheduled to begin by the end of 2026.

See also: VW Europe battery needs sorted for now – report