From mining critical minerals to building batteries and cars, Canada and Ontario continue to attract historic and transformative investments across the electric vehicle supply chain to secure more well-paying jobs for workers today and for decades to come.
Last month, Canada and Ontario secured a historic investment from Volkswagen, Europe’s largest automaker. Volkswagen is investing $7 billion to build its first offshore electric vehicle battery factory in St. Thomas, Ontario. This is the largest EV-related investment in Canadian history, indicating a strong vote of confidence in Canada, Ontario’s highly skilled workers, strong economies, and competitive business environments.
Join today the Premier, Justin Trudeau, the Premier of Ontario, Doug Ford, the Minister of Innovation, Science and Industry, François-Philippe Champagne, and Ontario’s Minister of Economic Development, Job Creation and Commerce, Vic Fedele, to highlight this generational deal for the electric vehicle supply chain in St. Thomas and Ontario are entirely in Canada.
The plant, Volkswagen’s largest to date, will create up to 3,000 direct jobs and up to 30,000 indirect jobs. Once complete in 2027, the plant will produce batteries for up to 1 million electric vehicles annually, boosting Canada’s domestic battery manufacturing capacity to meet electric vehicle demand now and in the future. The plant, which will generate about $200 billion in value, will be Canada’s largest manufacturing plant. Construction is expected to start next year.
To strengthen and grow St. Thomas and surrounding communities, Ontario will invest in other important infrastructure projects throughout the region, including road and highway improvements, utility services, and police and fire services.
Since 2020, historic new investments have been made in Ontario by global automakers as well as suppliers of electric vehicle batteries and battery materials. From mining critical minerals to building batteries and electric vehicles, Canada and Ontario have the resources and skilled workers to continue to lead the world. That means a strong economy, well-paying jobs, and clean air now and in the future.
quotes
“When we talk about our Designed in Canada plan, we talk about creating good middle-class jobs now and in the future, we talk about fresh air for our children and grandchildren, and we talk about a strong economy that works for all Canadians. That’s what Volkswagen’s new electric vehicle battery plant in St. Thomas – the largest factory ever built in the country -. It’s a win for the workers, the community and the economy.”
“This investment, the largest in automotive history in our province, is a huge win for Ontarians and the people of St. Thomas and surrounding areas. We are delighted to welcome Volkswagen and Powerco SE to Ontario and thank them for their tremendous trust in our province, our workers, and our growing electric vehicle supply chain. Welcome to the Team Ontario, Volkswagen!”
“Today’s announcement is a true testament to our highly skilled workforce and strong and growing battery ecosystem in Canada. Volkswagen’s decision to establish its first overseas mega-plant in Canada speaks to our country’s competitiveness when it comes to attracting major investment. It is also a vote of confidence in Canada as a green supplier of choice to the world. With Volkswagen and Powerco SE, our government looks forward to working together towards a cleaner, more sustainable and resilient economy.”
Last October, we met with Volkswagen in Germany to discuss the possibility of a new facility to manufacture batteries for electric vehicles. Six months later, we are proud to say that this potential is becoming a reality. Volkswagen’s historic investment will strengthen the overall electric vehicle supply chain and create more well-paying jobs for workers in St. Thomas and across the province. Our government continues to create the conditions for businesses and workers to succeed now and in the future. Thank you, Volkswagen, for choosing Ontario.”
“North America plays a key role in our global battery strategy. The region will become PowerCo’s second pillar next to Europe, with made-in-North American battery cells for North America. Gigafactory St. Thomas opens the door to a key market for e-mobility and battery cell production. We aim to make PowerCo a player “Gigafactory St. Thomas is an important milestone in our roadmap.”
“We are honored to partner with Canada, Ontario and the City of St. Thomas to take the electric vehicle industry to a new level. PowerCo was established in Europe to make a difference in the battery business, offering cutting-edge cell technology and sustainable manufacturing. This includes creating up to 3,000 new jobs and great working conditions for our employees in the St. Thomas area. We share the same values and are committed to being a trusted partner to the people of St. Thomas and Ontario.”
quick Facts
- Canada has committed to providing Volkswagen with production subsidies to match the United States Inflation Reduction Act(IRA) Advanced Manufacturing Production Credit, which equates to $35 per kWh. Just like in the US, Canada’s subsidies will only be for what is produced and sold and will be phased out by 25 percentage points each year starting in 2030 (after 2032, the credit will be phased out). The agreement also has the flexibility to be modified should the American Advanced Manufacturing Production Credit change to the United States
- The investment per battery with PowerCo SE is between $8 billion and $13.2 billion, depending on production levels. This is part of a comprehensive battery electric vehicle investment partnership between Canada and Ontario. Projections indicate that the full economic impact of the project will be equal to the value of government investment in less than five years.
- To support Volkswagen’s investment, the Ontario government is providing $500 million in direct incentives to the company, and is investing hundreds of millions of dollars to enhance and develop St. Thomas and surrounding communities. This includes infrastructure improvements to roads, rail, water, electricity, police and fire safety.
- Canada’s automotive sector supports more than 500,000 workers, including nearly 100,000 in Ontario auto plants, contributes $16 billion annually to Canada’s GDP, and is one of the country’s largest export industries.
- Ontario’s automotive supply chain consists of more than 700 parts companies, more than 500 tool and die makers, and more than 300 connected and independent companies. The province is the only place in North America where five major automakers make their cars, including Honda, Toyota, Ford, General Motors and Stellantis.
- The Volkswagen Group is one of the largest automakers in the world with a group of 10 companies.
- Volkswagen’s new electric vehicle battery manufacturing facility covers an area of approximately 370 acres, which is larger than 378 American football fields. The total area of the industrial and supplier complex will be 1,500 acres.
- In August 2024, the Government of Canada signed a Memorandum of Understanding with Volkswagen to enhance cooperation in manufacturing electric vehicle batteries in Canada.
- Since the beginning of 2024, the governments of Canada and Ontario have helped attract other historic investments across our EV supply chain—from mining to manufacturing—and provided funding to position Canada and Ontario as global leaders in battery manufacturing. This included support:
- Retool Honda Canada’s manufacturing operations in Alliston, Ontario, to launch the next generation of plug-in hybrid electric vehicles; And
- Modernization of automaker Stellantis’ assembly plants in Windsor and Brampton, Ontario, to help the company increase production of electric vehicles.
- Canada The 2030 Emissions Reduction Plan: Canada’s Next Steps for Clean Air and a Strong Economy is an ambitious and achievable roadmap that outlines a sectoral approach for Canada to reach its climate target of cutting emissions 40 percent below 2005 levels by 2030, putting us on track towards our goal of achieving net zero emissions by 2050.
- Transportation accounts for about a quarter of our emissions in Canada. That’s why the Canadian government has an ambitious goal of 100 percent zero-emission vehicle sales by 2035, along with a range of support measures from infrastructure fees to purchase incentives.
- Driving Prosperity Phase 2, Ontario’s 10-year vision for the automotive sector, focuses on transforming the automotive sector by building electric, autonomous and connected vehicles and supporting a broader supply chain that includes exploration, mining and production of minerals critical to manufacturing electric batteries in Ontario.