Volkswagen battery plant in St. Thomas delayed to 2029
The $7-billion facility, which will be one of the world's largest buildings, is being built to accommodate next-generation technology.
ST. THOMAS — The Volkswagen subsidiary building an electric vehicle battery "gigafactory" in St. Thomas, Ont., says the facility is now expected to begin operations in 2029, two years later than originally planned.
PowerCo Canada made the announcement in a news release about hiring Mississauga, Ont.-based EllisDon Corporation as the general contractor for construction of the factory.
"St. Thomas is now expected to begin operations in 2029 to accommodate next-generation battery technology, while retaining the flexibility to scale over time as market conditions evolve," the company said.
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PowerCo spokeswoman Tegan Versolatto said the timeline reflects a disciplined approach to an evolving market, not a change in commitment.
Ontario Premier Doug Ford said Friday he is not worried about the delay.
"I'm feeling good that they're building the fourth largest facility building in the entire world, 16 million square feet," Ford said.
"What would make me worried is if they said they aren't building, but they're building and it's going to be a massive, massive facility."
Economic Development Minister Vic Fedeli called the announcement good news.
"To us it's a great news story the building is being built," Fedeli said. "The investment is being made and we're thrilled."
Originally scheduled for a 2027 opening, the $7-billion factory was first announced in 2023. It was estimated it would result in the creation of 3,000 direct jobs and tens of thousands of indirect jobs.
The federal government committed $700 million in upfront capital costs to build the factory and Ontario kicked in $500 million. The two governments are providing $1.4 billion that includes some loans.
There are also upward of $13 billion in government subsidies tied to production output on the table.
Andrew Lawton, the Conservative MP representing Elgin, St. Thomas, London South, called news of the delay disappointing and questioned Volkswagen's commitment.
"I realize that Volkswagen is saying it's just about pace and not about the overall commitment. But ultimately, it is about the commitment because we were expecting this to be moving forward at a speed that we're just not seeing," Lawton said.
St. Thomas Mayor Joe Preston, who has championed the factory, told CBC News he's unfazed by the two-year delay.
"They've picked a great local Canadian general contractor and in doing so, they had to adjust the [opening] date," said Preston.
He said he drives by the plant every day and there's about a billion dollars' worth of construction that's already occurred.
Opposition parties at Queen's Park expressed concern.
"There's no way that this is good news for people, this is not good news for workers who desperately need those jobs, for all the other spinoff industries that are relying on that, and also in a region which has already seen substantial layoffs," said NDP Leader Marit Stiles.
Liberal legislator Stephanie Smyth said she's worried the delay is a precursor to a shutdown.
"This is not, in our opinion, cause for celebration, but cause for concern," Smyth said.
EV sector headwinds
The delay underlines the headwinds faced by EV makers amid slowing demand for zero-emissions cars.
Several manufacturers have delayed or cancelled their plans in Ontario recently.
Honda indefinitely suspended a $15-billion EV plant in Alliston. General Motors ended production of its BrightDrop electric delivery van in Ingersoll, laying off hundreds. Ford delayed plans to build electric vehicles in Oakville.
Stellantis walked away from its NextStar EV battery joint venture in Windsor earlier this year.
At the same time, Canadian EV sales have shown signs of growth. Statistics Canada data released in June showed the number of new EVs purchased by Canadians had increased by more than 20 per cent compared with the same period a year earlier.
Construction on the St. Thomas plant began in October 2025, with work starting on the foundations. PowerCo has been hiring workers in the area since August 2025.
"Partnering with EllisDon allows us to keep construction moving while ensuring we retain the flexibility to scale the facility in line with market demand and long-term industry evolution," said Joel Karlsberg, chief procurement officer of PowerCo Canada.
With files from The Canadian Press, CBC News and BNN Bloomberg