Canada’s First Giga-scale Battery Plant is Under Construction. Why That’s Important

VW’s Gigafactory Is Proof Canada’s Critical Minerals Strategy Is Finally Becoming Real

For years, Canada has promised to build a full critical minerals and battery supply chain. We’ve published strategies, signed MOUs, pitched foreign investors, and talked endlessly about “value-added opportunities.” But these were mostly aspirations, not assets. Now, in St. Thomas, Ontario, the strategy is turning into steel and concrete.

Volkswagen’s PowerCo is erecting one of the largest battery-cell factories in the world, up to 90 gigawatt hours (GWh) at full build-out, on a 350-acre site where main-building construction is now underway. The project is no longer a political announcement. It is the physical anchor of a Canadian supply chain that finally runs from mineral extraction to finished battery packs. And its arrival signals something important: Canada is no longer trying to join the global battery race. It is in the race.

Where St. Thomas fits in the supply chain

A modern lithium-ion battery supply chain has four major steps:

1. Mining – extracting critical minerals (lithium, nickel, graphite, manganese, cobalt).
2. Refining & processing – turning raw ore into battery-grade materials (sulfates, precursors, cathodes, anodes).
3. Cell manufacturing – assembling electrode materials into the electrochemical “cells” that store energy.
4. Pack manufacturing – integrating cells into packs with cooling, electronics, and enclosures for EVs.

Volkswagen’s St. Thomas plant is step #3: battery-cell manufacturing. This is the heart of the value chain and the highest-value manufacturing stage after cathode-active materials.

But what makes this project strategically significant is how it connects backward to Canada’s upstream minerals and forward to pack integration in Ontario’s automotive plants (backward and forward linkages explained). The plant creates a gravitational centre that pulls the rest of the supply chain into alignment:

• Mining and refining in Ontario, Quebec, and Atlantic Canada now have a guaranteed world-class customer.
• Cathode and precursor manufacturers—like Umicore in eastern Ontario—fit directly into VW’s procurement needs.
• Automakers assembling EVs in Ontario (Stellantis, GM, Ford, Honda) will have access to locally manufactured cells.

For the first time, Canada is on the cusp of closing the loop. Mining investment only makes sense if processing exists. Processing only makes sense if cell producers are located nearby. Cell producers only invest where EV platforms are already being built. St. Thomas is the keystone that allows the whole arch to stand.

Why this story matters so much for Canada

This project is not just another automotive investment. It represents a structural shift in Canada’s economic future.

1. We are finally capturing midstream value, not exporting it.

Historically, Canada exported raw materials while other countries captured the high-value manufacturing. Lithium from Quebec and graphite from Ontario would have ended up processed in Asia, turned into cells in Asia, and shipped back to North American automakers.

St. Thomas flips that equation: value now stays in Canada.

2. It creates the conditions for a domestic critical-minerals flywheel.

Mines need demand certainty. St. Thomas provides it.
Refiners need stable offtake. St. Thomas provides it.
EV manufacturers need proximity to cell production to meet trade requirements. St. Thomas provides it.
This is how integrated industrial ecosystems form.

3. It positions Canada as a serious global player in the energy transition.

Volkswagen chose three global hubs for its unified-cell strategy: Salzgitter (Germany), Sagunt (Spain), and St. Thomas (Canada). That is extraordinary company and a sign that Canada is no longer a peripheral actor.

4. It strengthens North American supply-chain resilience.

With the United States desperate to reduce dependence on Chinese cells, Canada becomes central to the continental EV strategy. St. Thomas is much more than a factory; it is an insurance policy for North American automakers.

5. It sticks even through global headwinds.

The EV slowdown of 2024–25 forced VW to delay or scale European plans. But not this one. The St. Thomas timeline still targets 2027. That tells you where VW believes long-term North American EV demand is heading.

Only now do we get to the nuts and bolts

PowerCo confirmed in late October and early November that major building construction is underway, with concrete pouring and steel erection on the 350-acre site . Magil Construction Canada Inc. is executing the foundation package—more than 30,000 cubic metres of concrete. Steelcon Group is erecting nearly 5,000 tonnes of structural steel.

Ontario government releases reinforce the original job estimates: roughly 3,000 direct workers in the plant, plus thousands more across the local supply chain.

The timeline remains unchanged: start of production in 2027, with capacity rising toward 90 GWh per year, enough for more than a million EVs depending on pack size. This plant will use Volkswagen’s unified prismatic cell format, the global architecture meant to drive scale across all PowerCo factories.

Construction is advancing through the classic gigafactory phases:

• site preparation and utilities (2023–2025),
• foundations and steel (2025–2026),
• equipment installation and dry-room integration (2026–2027),
• commissioning and ramp-up into 2028.

In other words: the milestone that matters, the one that transforms political rhetoric into industry reality, is already behind us. The factory is rising.

The bottom line

Volkswagen’s St. Thomas project is not a symbol. It is a signal. A signal that Canada’s critical minerals strategy has crossed the line from policy into practice. A signal that the country finally has a nucleus around which a full battery supply chain can grow. And a signal that the energy transition’s most valuable manufacturing step—battery-cell production—is no longer something Canada watches from the sidelines.

This time, Canada is in the game.