Oliver Blume, CEO of Volkswagen, justified the German car company's decision to build the largest battery factory to date in Canada due to the excellent conditions offered there.

Blume told journalists in the capital Ottawa on Monday: "The Canadian government has made an excellent offer. Subsidies play an important role in making such a project economically viable. The Canadian government has provided excellent opportunities."

Blume explained that in addition, "Canada acted very practically. We decided on the project within a very short period of time."

Volkswagen plans to build the largest battery cell factory to date in St. Thomas, Canada, with an investment of up to 4.8 billion euros (5.3 billion dollars). Production is scheduled to begin in 2027.

Alongside German President Frank-Walter Steinmeier and Canadian Prime Minister Justin Trudeau, the factory construction agreement was signed in Ottawa on Monday.

Blume described the occasion as a "historic day."

This is the group's largest investment in a battery cell factory and also the largest investment abroad.

Blume said: "This confirms the importance of the North American market for Volkswagen. On the other hand, it is a great sign of the partnership between Canada and Germany."

He described it as a win-win situation with benefits for both countries.