Salzgitter, Germany– German auto giant Volkswagen said Monday it would build a battery plant in Canada but gave little away about its plans in Europe amid continued concerns about Washington’s green subsidies.
The group’s first North American battery factory will be located in St. Thomas, Ontario, the group said.
Production will start in 2027, with CEO Oliver Blume stressing that “our North American strategy is a key priority”.
Volkswagen is also setting up a series of battery plants in Europe — one will open in 2023 in Sweden, followed by one in Salzgitter, Germany in 2025 and the company has chosen Valencia, Spain for a third.
Volkswagen said last year it planned to open a total of six plants with partners in Europe, but the plans have moved slowly.
Asked about the state of play in Europe, Thomas Schmall, CEO of VW’s components division, said the group was finalizing the decision on where the next plant would be and it would be announced in due course.
During a press tour of the 10-brand group’s site in Salzgitter, he said they would “need more than three” European plants but would decide whether six would be necessary, depending on the environment.
Washington’s massive subsidies for electric vehicles under President Joe Biden’s landmark action plan have been extended in Canada.
However, the European Union has not received the same treatment, and the plan is stoking fears that the bloc’s businesses could be lured to set up shop in the United States rather than at home.
With its own battery plants, Volkswagen is seeking to reduce dependence on Asia.
It is also facing a tough fight against US rival Tesla for dominance of the electric car market.
Under its different brands, Volkswagen plans to introduce more than 25 different new electric models by 2030 in the United States.