The CEO of the company's battery division said on Friday that Volkswagen's new electric vehicle battery factory, being built in southwestern Ontario, could eventually grow to become the largest massive automotive factory in the world.

The company announced last month that it selected Saint Thomas as the site of the first gigafactory in North America.

Canada allocated $700 million as upfront capital costs towards about $7 billion to build the factory. Ontario added $500 million.

Also, once the factory produces the batteries - the initial goal is to produce enough each year to power one million electric vehicles - Canada will provide production subsidies equal to the tax exemptions Volkswagen would have received if it had established a plant in the United States.

These subsidies, estimated to be worth between $8 billion and $13 billion over a decade, will disappear or decrease if U.S. support under the Inflation Reduction Act is canceled or reduced.

For his part, Prime Minister Justin Trudeau said every cent is worth it.

He added: "Let's be very clear about what is happening today. Other parts of the world, including our neighbors to the south, were willing to pay a lot of money to get this project done there. Everyone wanted this, so yes, we put a lot of money. Money that will return quickly in economic investments."

The federal government also said that with the economic benefits from the factory, government investments will be recovered within just five years.

The factory will provide up to 3,000 direct jobs and 30,000 indirect jobs in the region. It will also be operated by PowerCo, a subsidiary of Volkswagen Battery company established last year. The Saint Thomas factory is the third factory the company plans, but Blum said that due to the rapid growth in demand for electric vehicles in the United States, it could eventually become the company's largest factory.

The factory will be built on a "massive site" covering 1,500 acres, with construction scheduled to begin in 2024 and production expected to start by 2027.