• Volkswagen’s new EV battery plant to be built in Ontario could be the biggest VW plant of its kind in the world.
• Canadian Prime Minister Justin Trudeau confirmed that Canada provided VW with $13 billion in subsidies.
• The PM also contends the plant will ultimately be worth $200 billion to the Canadian economy.
On the eve of Earth Day, the Canadian government today gave an official welcome to Volkswagen for it plan to built a massive new EV battery plant in St. Thomas, Ontario.
The German automaker is investing $7 billion in the plant, but it also is receiving $13 billion in subsidies from the federal government over the next decade. Prime Minister Justin Trudeau confirmed that today in a speech to government and VW officials in St. Thomas. He added, however, that the government estimates the plant will ultimately add $200 billion to the Canadian economy.
The plant is expected to employ upwards of 3,000 workers and lead to creation of many more spin-off jobs (30,000, according to Prime Minister Trudeau).
At the least, the new plant will be Volkswagen’s largest battery factory in North America, but it could end up being its biggest worldwide, according to Frank Blome, CEO of VW subsidiary PowerCo, which manufactures EV batteries.
In the eyes of several industry analysts, the $13 billion in subsidies is a large amount, but also the price to pay to ensure VW chose Canada for its battery plant and not the U.S. Recall that the United States recently passed the Inflation Reduction Act, which offers large subsidies to auto companies as well.
Volkswagen says the plant will feature six production lines and produce batteries for one million EVs. Most of the 25 new EV models the company plans to introduce in the coming years and into next decade will receive batteries from the future St. Thomas plant.
Certainly for Ontario and its automotive sector, which has been through some tumultuous years over the past two decades, this is more good news among a lot of it in the last three years. Said Vic Fedeli, Ontario’s minister of economic development, job creation and trade, “This is the largest auto investment in the province's history. It's a complete turnaround of the auto sector in three years. We're back. Ontario is back.”