German automaker Volkswagen has secured an exclusive contract with Canada worth potentially over $13 billion over the next decade to construct an electric vehicle (EV) battery plant in southwestern Ontario, marking a significant milestone for the country's automotive industry. Industry Minister Francois-Philippe Champagne hailed the deal as a "game changer," revealing that the decision came after formal pitches made by Canada to Volkswagen in Germany. In March, Volkswagen announced St. Thomas, Ontario, as the site for its first overseas gigafactory, operated by its battery company, PowerCo. While the United States had an advantage in proximity to vehicle manufacturing, Canada stood out for its abundant raw materials and clean energy resources. The contract entails an upfront capital investment of $700 million and production subsidies for each battery sold, totaling up to $13 billion over a decade. Details regarding job creation and further information about the plant are expected to be disclosed during a planned announcement in St. Thomas. Finance Minister Chrystia Freeland underscored the significance of such investments in the context of the global shift towards clean technology, emphasizing Canada's determination to secure its position in the clean-tech industrial revolution. Champagne highlighted the potential for job creation and economic benefits, asserting that Canada's investment will be recouped within five years. The upfront cost is limited to $700 million, with additional expenditures contingent on the construction and operation of the plant.
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