Volkswagen to build electric vehicle battery plant in Canada

Volkswagen announced Monday it plans to build a major plant for electric vehicle batteries in Canada.

The European automaker said the Volkswagen Group and its battery company PowerCo will establish its first overseas ``gigafactory″ for battery cell manufacturing in St. Thomas, in southwestern Ontario. The start of production is planned for 2027.

The company signed an agreement last year with the Canadian government to work to identify suitable sites for such a facility in Canada. It also had committed to investigate ways for Canada to contribute to Volkswagen's battery supply chains, including raw materials and assembly.

The province of Ontario set the stage last month for the announcement, introducing and quickly passing a law adjusting the municipal boundaries for a 1,500-acre ``mega site″ in southwestern Ontario.

The province's Economic Development Minister Vic Fedeli said at the time that the piece of land had straddled two municipalities, but that it was being fit into one to eliminate bureaucratic challenges of dealing with two municipalities.

Canada has seen at least 10 major electric vehicle-related commitments totaling more than $16 billion Canadian (US$12 billion) in the past two years as federal and provincial governments work to attract investments in the sector.