Volkswagen plans to make Canada a key cog in its electric vehicle supply chain, but the head of the German automaker’s Canadian division says the switch toward electrification will not be quick but a gradual one.

Volkswagen Canada head Edgar Estrada spoke to BNN Bloomberg's Jon Erlichman rececently and offered some new details on the company’s outlook for the country, including plans to build a massive battery plant in St. Thomas Ont. by 2027.

The plant is expected to contribute to the production of one million vehicles a year, with the potential of even more moving forward. Estrada, who headed up Volkswagen’s operations in Mexico before coming to head up the Canadian unit, says the country represents "a very interesting and challenging market," and "it has an interesting path in the way to electrification."

He added Canada has a more "advanced and clear set of rules and regulations” that allows car makers “the opportunity to really develop the EV market."

While there have been some concerns over whether there will be enough genuine consumer interest to warrant the hype in the EV sector, Estrada says the demand is there over the long run.

But Estrada says electrification “will be a transition, it won’t happen from one day to another.”

A big factor in the adoption of electric cars will be the availability of charging stations, he said.

Update on St. Thomas facility

Estrada also provided an update on the St. Thomas facility. The Ontario-based factory will provide 1 million batteries per year, components that will be used throughout the company’s supply chain.

"The plant is strategically located in Canada because it will fulfill orders in all region from Canada to Mexico."

Government investment

The federal and Ontario governments have put up billions of dollars in subsidies and tax credits to EV manufacturers to incentivize them to build plants in Canada, and Volkswagen has been one of the beneficiaries of this policy.

When asked about his view on whether the government should be giving subsidies to automakers, Estrada said “it’s a matter of different factors: location, raw materials, support are important but strategic vision from the company to really fulfill part of North American region demand is key."