The City of St. Thomas, Ont., long-known as the Railway Capital of Canada, will soon be home to the largest EV battery plant in the country. Owned by Volkswagen Group subsidiary PowerCo, the facility will be part of the 1,500-acre Yarmouth Yards industrial park.Supplied/PowerCo
St. Thomas, Ont., long-known as the Railway Capital of Canada, will soon be recognized as being home to the country’s largest electric vehicle (EV) battery plant.
The gigafactory – owned by EV battery manufacturer PowerCo, a subsidiary of Volkswagen Group – will include six production blocks across 370 acres, the size of more than 200 soccer fields.
The plant, expected to start production in 2027, is just a part of the vision for St. Thomas’ 1,500-acre Yarmouth Yards industrial park. The mega-site will accommodate other industrial businesses, as well as new and expanded infrastructure, to support the city’s burgeoning industrial scene.
“The selection of St. Thomas by PowerCo is truly a catalyst for what is a generational investment in the infrastructure of the city,” says Sean Dyke, CEO of the St. Thomas Economic Development Corporation. “Without PowerCo, the vision for where we are now and for what the future St. Thomas will look like would never have come to be.”
The project comes as Canada strives to expand domestic EV production and support the adoption of zero-emission vehicles across the country, with the federal government targeting 75 per cent of new vehicle sales to be EVs by 2035 and 90 per cent by 2040.
Attracting the manufacturing capacity required to achieve these goals depends on having the right infrastructure – a growing challenge in the national industrial real estate market.
Setting the infrastructure scene
While the PowerCo facility in St. Thomas will be a private commercial operation, the federal government is investing $16-billion to support production and the tax adjustments required to make the after-tax value of the investment comparable to in the United States.
Evan Robinson, a spokesperson with Ontario’s Ministry of Economic Development, Job Creation and Trade, says the province is interested in supporting projects such as the PowerCo gigafactory since it “competes with jurisdictions around the world for major advanced manufacturing investments.”
One way the province is supporting the project is through the expansion of Highway 3 in St. Thomas by providing a “critical transportation link” to the PowerCo plant.
The City of St. Thomas is managing the infrastructure within the Yarmouth Yards property, which it acquired between 2022 and 2023. “Having shovel-ready land takes years, and without it, it’s very difficult for investors to see themselves in that location,” says Mr. Dyke. “It’s one of the most important factors in any site selection process.”
The infrastructure advances, combined with PowerCo’s multi-billion-dollar commitment, is already attracting new industrial players to Yarmouth Yards. Norwegian battery materials company Vianode will operate on around 280 acres of the site, according to the city.
“When governments make major investments in transmission, roads, water, waste water and serviced employment land… that infrastructure doesn’t only have value to the original company,” says Brent Rudell, broker of record at Cushman & Wakefield Southwestern Ontario. “You potentially make an entire area more competitive for the next company that comes along.”
The PowerCo facility is expected to have a potential annual battery production capacity of up to 90 gigawatt-hours, enough to power about a million EVs per year. It’s also intended to directly create 3,000 new jobs and thousands more indirectly.Supplied/PowerCo
Real estate ripple effects
Built with tenants such as PowerCo and Vianode in mind, the facilities coming to Yarmouth Yards will be designed for energy-intensive manufacturing.
Access to high-capacity power is becoming a non-negotiable for many industrial real estate players. The Independent Electricity System Operator (IESO) forecasts that Ontario’s electricity demand will surge by 75 per cent by 2050, with electric vehicle supply chain manufacturing being one of two main drivers.
But outfitting an older facility with greater electrical capacity is not always possible, and when it is, the upgrades may take a considerable amount of time to complete.
Joe Rosati, senior vice-president at Lennard Commercial Realty, expects this will dictate future demand for industrial real estate. He says he thinks energy-intensive processes will be drawn to purpose-built industrial facilities that can be easily adapted.
“St. Thomas is a good example,” Mr. Rosati says.
Advanced manufacturing also creates industrial real estate demand from the broader network of companies that support it.
“It isn’t necessarily the battery manufacturer or auto maker itself. There is a whole ecosystem around these large investments: Parts suppliers, automation companies, engineering companies, logistics, specialized manufacturing and other businesses that want to locate within the same corridor,” says Mr. Rudell. “That creates opportunities for Southwestern Ontario because we already have a very strong manufacturing base.”
Mr. Rosati points out that EV operations aren’t the only industrial users that require substantial power capacity.
“Even for more conventional industrial properties, we’re seeing more occupiers require more and more power and landlords are often having to upgrade the power infrastructure at their facilities,” he says.
A pragmatic bet for St. Thomas
PowerCo’s project in St. Thomas will have a potential annual battery production capacity of up to 90 gigawatt-hours, enough to power around one million EVs per year. It will also create up to 3,000 new jobs directly and thousands more indirectly, according to Volkswagen Canada.
But the EV market is currently underpinned by volatility. This spring, Volkswagen announced it is ending production of its electric ID.4 SUV at its Tennessee assembly plant – one of two assembly facilities that PowerCo’s St. Thomas operation would have supplied.
The cancellation coincided with sluggish EV consumer demand in North America. Between the first quarters of 2025 and 2026, EV sales fell 27 per cent in North America, despite declining only three per cent globally, according to industry resource Electrek.
In Canada, zero-emission vehicles accounted for around 11 per cent of new vehicle registrations in this year’s first quarter, according to Statistics Canada. While that figure was up almost 16 per cent annually, it was also the first year-over-year increase since the fourth quarter of 2024.
The slow EV uptake is what makes the broader industrial strategy for Yarmouth Yards so important, says Mr. Dyke.
“Our vision for Yarmouth Yards is twofold. We certainly want to grow and support the EV supply chain as much as possible, but my expectation is that it will naturally fill with a broader advanced manufacturing base as a number of sectors are growing right now, from automotive to defence to food processing.
“We are in the perfect position to support all of these and are surrounded by a region with similar strengths.”