Construction work on another electric-vehicle supply chain plant in southwestern Ontario is set to begin soon.

Electric battery manufacturer PowerCo SE, which is owned by the Volkswagen Group, announced this week that servicing work is now complete at the site of its future cell gigafactory in St. Thomas. Construction will start next year, with the start of production targeted for 2027.

"We are fully on track,” said Sebastian Wolf, Chief Operations Officer of PowerCo SE. “We are now ready for the next stage on our path to the sustainable and responsible production of battery cells. PowerCo will be a reliable partner for the people in St. Thomas and Ontario.

The St. Thomas location will be the company's first overseas gigafactory for cell manufacturing. The facility will equip the Volkswagen Group brands' EVs in North America with unified cells, a new technology designed for cost efficient scale production.

The plant will also be the largest PowerCo gigafactory to date with an annual production capacity of up to 90 GWh in its final expansion phase. PowerCo says its planned investment of up to $7 billion by 2030 has the potential to create up to 3,000 skilled jobs at the factory along with thousands of indirect jobs within the region.

The factory is being built over an area of around 370 acres. It will also be supplied with CO2-free energy.

"This important step forward is a sign of the continued progress being made by PowerCo Canada Inc., working in tandem with support from the Government of Ontario,” said Ontario’s Economic Development Minister Vic Fedeli. “When completed, this gigafactory will represent a significant milestone in the end-to-end auto and EV battery supply chain growing across the province. We also welcome the news that PowerCo Canada Inc. has begun local hiring and setting up its resident office in St. Thomas. We will continue to monitor the progress of this project with eager anticipation."

PowerCo says the decision to expand into Canada is further proof of the ambitious growth strategy of the Volkswagen Group in North America. This includes the introduction of a broad portfolio of full-electric vehicles in the United States and Canada by 2030, the expansion of Electrify America's coast-to-coast charging network in the U.S. and Canada, as well as the announcement of the return of the Scout brand to deliver its first all-electric vehicles in 2026.

PowerCo Canada, which will steer the battery company’s activities in North America, is currently building its footprint in St. Thomas. The company is already working with project management consultants Turner & Townsend and designers WSP. It has also started the environmental assessment process for building out local highway and road infrastructure to support the new plant.