Contracts handed out to build Ontario EV battery plant amidst tariff uncertainty
The company behind the plan for a massive battery plant in southwestern Ontario says uncertainty in the electric vehicle market and U.S. President Donald Trump’s tariffs aren’t causing a rethink, as it marks a new milestone for the project.
PowerCo SE, founded by automaker Volkswagen, is currently building a gigafactory in St. Thomas, Ont., to produce batteries for its growing electric vehicle range.
On Thursday, the company announced it had signed two contracts to begin major construction on the 140-hectare site. Steelcon will deliver structural steel for the factory, and Magil Construction will take on foundations.
Meredith Gibbons, chief procurement officer at PowerCo, said the company already employs 200 people on the project. The new contracts will add 500 skilled jobs in the area, she said.
The battery plant, which the company says is on course to begin initial production in 2027, is being built under the cloud of tariffs and a changing vehicle market.
The Trump administration has levied tariffs on Canadian vehicles and removed subsidies introduced by former President Joe Biden to boost electric vehicles. Honda has postponed its plans for an EV plant in Canada, while GM paused production of its electric delivery vans.
Gibbons, however, said PowerCo and Volkswagen were taking a broader view of the situation and planning for the long-term with the St. Thomas megaproject.
“A lot of what we see going on right now is changing day by day, month by month,” she said.
“We’re building this factory for decades and generations to come. So what we’re doing here really outlasts a lot of what we see going right now; it’s not something that we’re going to allow to impact what we are doing for a long-term plan.”
The Ford government had worked to attract the German automaker to Canada for its first overseas project, including introducing and quickly passing a law adjusting local municipal boundaries for a “mega site” in southwestern Ontario.
The plant was first announced in March 2023, with a separate battery plant confirmed by automaker Stellantis and battery-maker LG Energy the year before.
— with a file from The Canadian Press
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