Last month, Canada and Ontario secured an historic investment from Volkswagen, Europe’s largest automaker in the order of $7 billion; today government announcements revealed that the company secured more than $13 billion in federal funds, plus another $500 million from the province.

The federal government will invest up to $13.2 billion over ten years, The Ontario government has committed $500 million in direct incentives to the company in addition to funds to support local infrastructure.

In addition to capital cost subsidies, Volkswagen and its battery company PowerCo SE will receive production subsidies tied to plant production volumes.

Why we cover this: Though it’s not specifically directed at the aftermarket, the historic nature of major EV investment warrants inclusion as the expected economic knock-on effects will certainly be significant both for the immediate vicinity of the plant, as well as the larger Canadian and North American supply chain.

For Volkswagen this is its first overseas electric vehicle battery manufacturing plant, to be located in St. Thomas, Ontario.

This is the largest electric vehicle-related investment in Canadian history.

The Prime Minister, Justin Trudeau, and the Premier of Ontario, Doug Ford, were joined today by the Minister of Innovation, Science and Industry, François-Philippe Champagne, and Ontario’s Minister of Economic Development, Job Creation and Trade, Vic Fedeli, to highlight this generational deal for St. Thomas, Ontario, and Canada’s entire electric vehicle supply chain.

The plant, Volkswagen’s largest to date, will create up to 3,000 direct jobs and up to 30,000 indirect jobs.

Once complete in 2027, the plant will produce batteries for up to one million electric vehicles per year, bolstering Canada’s domestic battery manufacturing capacity to meet the demand for electric vehicles now and into the future. The plant, which will generate about $200 billion in value, will be the largest manufacturing plant in Canada.

Construction is expected to begin next year and is just one of a number of EV investments in Canada.

In March 2022, Stellantis and LG announced a joint venture to build a lithium-ion battery plant in Windsor, Ontario.

In December 2022, the first BrightDrop all-electric delivery van rolled off the retooled GM CAMI assembly line in Ingersoll, Ontario.

In February of this year, it was announced that Unifor members at the General Motors (GM) St. Catharines Propulsion Plant will be the first Detroit Three facility in Canada to produce electric vehicle propulsion systems.

Ford Motor Company announced site transformation plans for Oakville that include both vehicle and battery assembly and the renaming of the facility to the Oakville Electric Vehicle Complex.