VW’s electric-vehicle battery plant in St. Thomas may spur London factories: MP

London has plunged into the electric vehicle (EV) battery plant market with federal cash to grow the sector here.

FedDev Ontario, Ottawa’s economic development agency, will give the London Economic Development Corp. $300,000 to lure global EV battery suppliers and support battery research at Western University and skills training at Fanshawe College, the federal agency’s minister announced in the city Wednesday.

It’s not a lot of money, but it lays the foundation for more support in the future, said Filomena Tassi.

“It’s the start of a journey and, given the nature of the evolving EV industry, it gives us the resources to venture into this new industry and see where it takes us,” said Kapil Lakhotia, LEDC’s chief executive.

“To target suppliers in the direct EV industry, we needed more resources. This will give us horsepower needed to go after suppliers.”

Tassi made it clear if LEDC lands prospective suppliers for Volkswagen’s $7-billion EV battery plant in St. Thomas, set to open in 2027, Ottawa will offer support.

“We don’t want to miss any opportunities,” she said. “We want the opportunity for the parts the EV battery needs right here in Ontario instead of from other countries.”

She stressed the money is only Step 1: “We’re hearing from companies they want the supply chain close.”

VW has one EV battery plant in Germany and is building another in Spain. LEDC will go to those plants’ suppliers and pitch them on supplying the St. Thomas plant. It also will connect with local suppliers, said Lakhotia. “It’s attracting new suppliers not here now in Ontario. We already have established automotive suppliers in the region. . . we will target both.”

VW’s St. Thomas plant, run by its PowerCo division, is expected to employ more than 3,000. It will be the German automaker’s first North American EV plant.

“This investment, this opportunity, represents a shift in our economic diversification,” said Mayor Josh Morgan.

He called the new VW plant “a regional win” that will benefit all of Southwestern Ontario.

“Volkswagen is coming, EV battery manufacturing is coming, the EV battery sector is about to explode,” Morgan added. “It’s our time to seize that potential and that opportunity to make London a key part of this green future.”

Suppliers chasing Volkswagen have the potential to land in London, the mayor added. “We will be organized, we will be relentless. . . we will continue to evolve our economy, look to the next best thing, be a part of it and be a leader.”

There are already signs the EV battery sector is growing here. Last year, PowerCo signed a battery materials supply deal with Umicore, which is building a cathode factory near Kingston to supply St. Thomas.

In addition, Stellantis and South Korean battery maker LG Energy Solution recently announced a $5-billion investment for a Windsor EV battery plant.

“There is so much opportunity that lies with these investments. What are the opportunities when you have Volkswagen here? This is a fact-finding mission,” said Tassi.

Peter Fragiskatos, Liberal MP for London North Centre, called the investment the start of “an enormous investment opportunity” for London.

“What we’re witnessing is nothing less than the reindustrialization of the southwest of Ontario,” he said.

Since 2015, FedDev Ontario has invested more than $60 million in 85 projects in the London region, creating more than 900 jobs and maintaining more than 1,000 jobs, an agency release said.

It has invested more than $41.5 million in 12 EV-related projects in the same period, creating and maintaining more than 400 jobs.

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VW BATTERY PLANT, ST. THOMAS