The Wolfsburg-based carmaker is planning its largest battery factory in Canada, which it is providing heavy subsidies for. For Volkswagen, this means less dependence on deliveries from Asia.
The first Volkswagen battery factory in North America will have gigantic proportions - starting next year, it will be built on an area equal to that which would occupy two hundred football fields. About three thousand people should work there from 2027.
The production of batteries for about one million cars per year has been announced. The factory will be located in St. Thomas - about halfway between the Canadian metropolis of Toronto and the American center of the automotive industry, Detroit.
Volkswagen invests five billion euros. As reported by the media, in the long term the German manufacturer can count on around nine billion euros in subsidies from the Canadian budget.
They are counting on American customers
Authorities there rely on a generous US subsidy program that will also apply to Canada as it has a free trade agreement with the US.
In the USA, buyers of electric cars will receive a tax discount of 7500 euros if the car is manufactured in the USA or partner countries.
Canadian Industry Minister François-Philippe Champagne stated that the benefits for the country will far outweigh the costs of the subsidies.
Prime Minister Justin Trudeau said at the presentation of the plans that it is a win for workers, the community and the economy.
The Canadians hope that tens of thousands more supplier jobs will spring up around the plant.
Escape from Asia
Volkswagen boss Thomas Schall said North America plays a key role in his firm's battery strategy. In the vicinity of Toronto and Detroit, he added, supply chains for the automotive industry have already been established.
In Europe, Volkswagen and its partners intend to open six battery factories in the coming years, which in total can supply close to three million vehicles a year.
The first of them opens this year in Sweden, and in 2025 one should follow in the German province of Lower Saxony.
Volkswagen thus reduces its dependence on Asian battery manufacturers, and will cover half of its needs in the future. Currently, the Far East, especially China, convincingly dominates the battery market.
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