Volkswagen has officially announced that they will be building their first Gigafactory in St. Thomas, Ontario, Canada.

(Bloomberg) -- Volkswagen AG has chosen Canada to build its first battery plant outside Europe in a bid to fast-track an expansion in the key US market.

The site, in St. Thomas, Ontario, is slated to start production in 2027, Europe’s biggest carmaker said Monday. The decision to locate the facility in Canada, amid rich incentives offered in the US as part of the Inflation Reduction Act, will help VW get access to key raw materials and clean energy, according to the company.

“We now have the unique opportunity to grow profitably in North America and play a key role in driving the transition to electric mobility,” VW Chief Financial Officer Arno Antlitz said in a statement. “Volkswagen has the right strategy, products and scale to take a strong position in the North American market.”

VW is seeking to turn the page from being an also-ran in the US with an enlarged footprint and a slew of new models and lessen its dependence on China, where it sell just under 40% of its vehicles. Earlier this month, VW-backed Scout Motors Inc. said it’ll build a new $2 billion plant making Scout-branded SUV in South Carolina.

VW is part of a wave of European companies looking to cash in on President Joe Biden’s climate law, which stipulates that 50% of the battery components of an EV must be made in North America to qualify for EV tax credits of as much as $7,500. The carmaker in August signed an accord with Canada to cooperate on the supply chain for batteries with a focus on material such as lithium, nickel and cobalt.

Earlier this month, Antlitz said the US policy, comprising some $369 billion in incentives, were a tailwind to the company’s plans. The St. Thomas plant marks VW’s third wholly-owned battery plant, in addition to sites in Germany and Spain.

The move follows warnings battery-cell plants would become unfeasible in Germany and Europe if the region didn’t bring energy prices under control. VW also has a range of partners, including Sweden’s Northvolt AB.