Volkswagen on Monday chose Canada as the site for its first North American battery cell factory as the automaker with an assembly plant in Chattanooga continues to push its electric vehicle offensive.
The Volkswagen Group and its battery company PowerCo selected St. Thomas in Ontario, Canada, for the factory for cell manufacturing with the start of production in 2027, according to the company.
The decision to expand PowerCo cell production ramp-up from Europe to Canada is further proof of the ambitious growth strategy of the group in North America, VW said in a statement.
Oliver Blume, Volkswagen Group's chief executive, said in the statement that with the cell production in Canada and the company recently picking a site in South Carolina to produce the new Scout EV line, "we're fast-forwarding the execution of our North American strategy."
"Our North American strategy is a key priority in our 10-point-plan that we've laid out last year," he said.
According to VW, Canada offers "ideal conditions" for the gigafactory including the local supply of raw materials and wide access to clean electricity.
Volkswagen already produces the all-electric ID.4 compact SUV in Chattanooga where it employs 4,700 people. The company said it also has plans to upgrade assembly plants in Puebla, Mexico, and Silao, Mexico, for the assembly of EVs and potentially for EV components such as electric motors in the second half of the decade.
Arno Antlitz, Volkswagen Group's chief financial officer and chief operating officer, said in a statement that the company has a unique opportunity to grow profitably in North America.
"Both new, major projects are integral building blocks of our ambitious growth program for the entire region," he said. "We will be able to address an even broader range of customers. Volkswagen has the right strategy, products and scale to take a strong position in the North American market."
Volkswagen Group brands plan to introduce more than 25 new EV models through 2030, according to the automaker.
Earlier this month, Volkswagen-backed Scout Motors announced it will build its first manufacturing plant near Columbia, South Carolina, where it will assemble trucks and rugged SUVs on a newly designed all-electric platform.
A $2 billion investment, the new production plant has the potential to create 4,000 or more jobs, the company said. Hearkening back to the iconic Scout vehicles produced from 1960 to 1980, more than 200,000 Scouts may be built annually at the facility at full capacity, according to the brand.
Scout, originally produced by International Harvester, was the world's first utility vehicle capable of both off-road adventure and family duty, according to the company. The factory will be the second assembly plant in the United States for VW.
-- Compiled by Mike Pare