Volkswagen is building a US$14 billion battery plant for electric vehicles in Canada

Canada scored a major victory earlier this year when German automaker Volkswagen announced that it was building a US$14 billion battery plant for electric vehicles in St. Thomas, Ontario.

Slated to open in 2027, the Volkswagen EV battery factory will be the first of its kind in Canada.

“With this historic project, we’re not just bringing back manufacturing, we’re bringing back a strong, thriving economy for this community,” Prime Minister Justin Trudeau said during a news conference in St. Thomas on April 21. “We’re delivering a national anchor for Canada’s electric vehicle supply chain.”

Canada outbid the U.S. and other locations to secure the Volkswagen EV battery plant, which will create more than 3,000 direct jobs and could bring in about $150 billion to the Canadian economy, Trudeau said.

Yet the Volkswagen plant is one of the country’s few major successes in attracting billion dollar manufacturing plants in recent years.

While parts of the U.S. and Mexico have benefited from unprecedented interest in reshoring and nearshoring of high-tech manufacturing because of shifting supply chain strategies, the movement hasn’t progressed as quickly in Canada.

“There is very little activity, or at least very little written, about reshoring to Canada,” Rosemary Coates, founder and executive director of the Reshoring Institute, told FreightWaves. “While labor is less expensive in Canada versus the U.S., labor is way cheaper in central Mexico. That is where companies are interested in moving to now.”

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