Volkswagen has formally chosen St. Thomas, Ontario, as the house for its first North American EV battery cell plant Monday, after revealing its rugged electrical SUV and pickup line Scout will construct EVs in South Carolina. The initiatives are a part of the the VW Group’s broader North American EV technique.

Shortly after the Inflation Discount Act was handed within the US final August, VW was amongst a number of world automakers seeking to construct and assemble EVs within the US to make the most of the brand new tax credit.

Volkswagen joined fellow German automaker Mercedes-Benz in signing a memorandum of understanding (MOU) to safe very important assets comparable to lithium, nickel, and cobalt for EV battery cells within the raw-material-rich nation.

The corporate stated it might start accelerating manufacturing by its PowerCo enterprise within the US with “dependable and sustainable provide chains.” VW established PowerCo, a 100% owned subsidiary, in July 2022 to deal with the automaker’s battery operations. PowerCo, by VW, plans to open six EV battery cell crops with 240 GWh mixed capability by 2030.

The primary PowerCo battery cell plant might be in Salzgitter, Germany, with manufacturing deliberate for 2025, whereas the second is deliberate for Valencia, Spain. Though a 3rd gigafactory was initially anticipated in Europe, Volkswagen just lately shifted its plans, prioritizing a North American plant to make the most of incentives from the IRA invoice.

VW selects Canada for its new EV battery cell plant

In response to VW’s press launch Monday, Ontario provides the perfect circumstances for its first PowerCo battery cell plant exterior of Europe together with plentiful uncooked supplies and entry to scrub vitality.

The corporate says that the manufacturing facility will equip VW Group EVs with sustainable unified cells and that manufacturing is predicted to start in 2027. The choice comes shortly after VW chosen South Carolina to construct its Scout model rugged SUV and pickup EVs.

Volkswagen expects to supply over 200,000 Scout autos with manufacturing slated to start in 2026 (and we may see Audi EVs produced on the web site). Oliver Blume, CEO of Volkswagen Group, commented on the choice, saying:

With the selections for cell manufacturing in Canada and a Scout web site in South Carolina we’re fast-forwarding the execution of our North American technique.

Blume says North America is a key a part of its 10-point technique unveiled final yr to speed up EV gross sales and profitability throughout its lineup. Volkswagen chosen North America over Europe for its third EV battery cell plant as a result of it believes it might probably declare upwards of $10 billion in subsidies and loans by the IRA invoice over the lifetime of the plant.

Particulars of the deliberate gigafactory are scarce, together with manufacturing capabilities, however VW says extra particulars on the St Thomas manufacturing facility might be revealed within the close to future.

Volkswagen is planning to introduce over 25 new electrical autos, together with the ID.4, by 2030. The automaker additionally plans to improve a number of crops in Mexico to assemble EVs and doubtlessly produce EV parts like electrical motors within the second half of the last decade.