Volkswagen and Their New Canadian Location

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Volkswagen has opted for a Canadian location to house its initial EV battery plant for the newly established PowerCo division beyond Europe. The factory, situated in St. Thomas, Ontario, is slated to commence manufacturing battery cells in 2027, as stated by VW’s official announcement.

Along with plants in Salzgitter, Germany, and Valencia, Spain, the St. Thomas site will become the third PowerCo battery facility worldwide according to Stephen Edelstein of

PowerCo Business Unit

As per VW’s announcement last summer, PowerCo will establish and manage a series of battery plants worldwide with the intention of integrating the EV supply chain vertically. According to reports, VW has been contemplating a Canadian location for several months, following the introduction of the Inflation Reduction Act (IRA) and the North American sourcing requirements for its new Clean Vehicle Credit.

This will provide incentives for EVs and essential components manufactured in Canada or Mexico at par with those made in the U.S. The PowerCo plants will generate a novel cell format designed for EVs based on VW Group’s next-generation Scalable Systems Platform (SSP).

Scout Motor Vehicles

The Inflation Reduction Act (IRA) incentive regulations have apparently influenced decisions concerning the expansion of North American EV assembly. VW already manufactures the ID.4 in Chattanooga, Tennessee, but now intends to modernize factories in Puebla and Silao, Mexico, to assemble EVs and potentially components such as motors in the latter half of the decade.

Moreover, Volkswagen has recently disclosed plans for a South Carolina facility for its Scout brand. This brand is not affiliated with the VW brand in the U.S. but is likely to leverage the same battery resources. Situated near the state capital of Columbia, the Scout factory will commence vehicle production in 2026, with an annual production capacity of 200,000 vehicles at full capacity. The first Scout model will be an electric SUV priced at $40,000, followed by a slightly pricier electric pickup. Both models are scheduled to be unveiled in 2024.

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