(St. Thomas) Volkswagen’s new electric vehicle battery plant in southwestern Ontario will create up to 3,000 direct jobs and 30,000 indirect jobs in the region, according to the Ontario government.
Prime Minister Justin Trudeau, his Ontario counterpart, Doug Ford, and the leaders of the German automaker unveiled Friday morning the details of this new “gigafactory” Volkswagen which will be built in St. Thomas, south of London.
Volkswagen, the world’s largest automaker, will invest $7 billion in the electric vehicle battery plant, which will be operated by its subsidiary, PowerCo.
Ontario Economic Development Minister Vic Fedeli called it “the biggest auto investment in the province’s history.”
Volkswagen’s contract with Canada will include an initial investment of $700 million and production subsidies for each battery the company makes and sells, up to $13 billion over a decade.
Ontario will invest $500 million in direct business incentives and spend hundreds of millions more to build roads, utilities, police stations and fire stations in the region, Minister Fedeli said.
The plant will be built on a 1,500-acre “megasite”; construction is expected to begin in 2024 and production could start by 2027, it says.
The plant is expected to produce enough batteries to power up to one million electric vehicles a year, the Ford government said.
The sprawling factory will be at the heart of an industrial park where several other manufacturers will be needed to supply critical battery components, Fedeli said.
Ottawa and Ontario began courting the German automaker a year ago when Volkswagen executives came to Toronto, Minister Fedeli said.
Federal Minister of Industry François-Philippe Champagne and Minister Fedeli officially presented their proposal in Germany last fall, which marked a turning point in the agreement.
PowerCo Chairman Thomas Schmall told reporters a month ago that the company looked at 200 different parameters when selecting its site.
The United States had an advantage in proximity to vehicle manufacturing, since Canada does not have a Volkswagen plant. But Canada had the advantage in raw materials – the minerals and metals needed for batteries – as well as an abundance of “clean energy”.
Minister Fedeli said the proposal included two “campaign elements that other countries lacked”: universal health care and the Canadian dollar. “We have argued what this means in terms of savings,” said the Ontario minister.
This will be the second electric vehicle battery plant in Ontario. Last year carmaker Stellantis and South Korean battery maker LG Energy Solution announced they were building a factory in Windsor at a cost of $5 billion.