Audi plant in Ontario ‘a real possibility’ with VW battery factory there, analysts say

With the new cell plant in St. Thomas locked in, Ontario’s prospects for the added Audi investment are better than they were before, but there is no guarantee, said Michael Robinet, executive director of automotive advisory services at S&P Global Mobility.

Labor supply in Ontario’s favor

An Ontario Audi plant would benefit from its proximity to battery production in St. Thomas, he added, but it would also be isolated from Volkswagen and Audi suppliers clustered around existing assembly plants in the southern U.S. and Mexico.

Access to workers is one mark in Canada’s favor, said Robinet, who is based in Michigan. As illustrated by Volkswagen’s cell plant decision, there are “pockets of labor” remaining in Canada, while the right mix of talent and available land are becoming scarcer in the southern U.S., he said.

“We’re finding now that vehicle manufacturers are locating dependent upon where they can find people. … You could get all the incentive money you want from a government, but if you can’t find the people to build the products, what good is it?”

This blend of factors has helped Canada and the U.S. Midwest, reassert themselves as automakers make the transition to EVs, Robinet said.

For Audi’s prospective plant, the two resurgent regions could be in competition.

VW moving quickly

Sam Fiorani, vice-president of global at AFS, said siting the assembly plant within a “reasonable” distance of St. Thomas makes “a lot of sense.” He pointed to southern Ontario and neighboring Michigan as likely prospects if Audi moves ahead with the new site.

“Volkswagen seems to be moving very quickly to establish itself for electric vehicles in North America, and Canada seems to be at the right place at the right time for that movement.”

But if the automaker’s luxury brand is considering Canada for its assembly plant, the explorations remain at an early stage.   

In the lead up to Volkswagen’s St. Thomas battery plant announcement in March, the automaker registered more than two dozen staff as lobbyists in Ontario and Ottawa. No comparable listings for Audi staff or consultants exist in the provincial or federal registries.

Neither the Ontario nor federal governments would comment on whether they have met with Audi, though both welcomed the prospect of adding to their recent automotive investment tallies.

“We openly welcome discussions with future investors in all sectors, including automotive, as we work to build a strong Ontario,” said Vanessa De Matteis, spokeswoman for Vic Fedeli, Ontario minister of economic development, job creation and trade, in an email.

Laurie Bouchard, spokeswoman for François-Philippe Champagne, federal minister of innovation, science and economic development, said it was encouraging to see Canada attracting the attention of global automakers.

“We will continue to do everything to ensure that Canadians can benefit from the global transition to electric vehicles,” she said in an email.