Volkswagen to invest EUR4.8 billion in Canadian EV battery plant

Peng Chen, DIGITIMES Asia, Taipei 0

Canadian PM Trudeau was present at the investment announcement. Credit: Volkswagen

Volkswagen aims to break ground on its largest battery plant to date in 2024. The carmaker said it will invest EUR4.8 billion (US$5.28 billion) in the battery project in Canada by 2030. The facility is expected to start production in 2027.

PowerCo, Volkswagen's battery subsidiary, made the announcement on April 21 with Canada prime minister Justin Trudeau standing alongside. Trudeau said the factory in St. Thomas, Ontario will be the largest manufacturing plant in the country once built.

According to PowerCo, the battery production base will achieve 90GWh of annual production capacity in the final expansion phase. The EUR4.8 billion project will create 3000 job opportunities in Canada and support Volkswagen's battery EVs in North America.

PowerCo said the plant will be located at the heart of the Great Lakes Automotive Corridor. With proximity to Toronto and Detroit, the company will have access to the regional research and innovation cluster and established supply chains. The company added that the construction is slated to begin next year and production is projected to start in 2027.

Launched in July 2022, PowerCo unveiled two other battery projects in Salzgitter, Germany and Valencia, Spain. The one in St. Thomas will be the company's first production site in North America.

Thomas Schmall, Volkswagen Group board member for technology, said in a statement that North America is crucial to PowerCo's global battery strategy and will become the company's second pillar besides Europe.

Volkswagen delivered 141,000 BEVs in the first quarter of 2023, the carmaker said. The number increased by 42% from the previous year, with European deliveries growing by 68%.

According to Volkswagen, Europe accounted for about 70% of its global BEV deliveries in the first three months of this year. China took up 15% with 21,500 vehicles and the US held 11% with 15,700 BEVs.

Thomas Schafer, CEO of Volkswagen Passenger Cars Brand, traveled to China last week to join the Shanghai auto show. According to China-based NetEase, Schafer said in Shanghai that China is the company's focus and takes up 40% to 50% of its time and resources.

The country accounted for 38.5% of Volkswagen's global sales last year. The CEO said China lead in advanced driver assistance system, autonomous driving, and infotainment systems under the automaker's development strategies.

He also said Volkswagen will not join the price war in China. As for its 2023 outlook in the market, Schafer said the first quarter result will be flat due to the end of the national EV subsidy program and the ripple effect. With new plans, Volkswagen will see sales increase starting from the second quarter and further growth in the second half of this year.