A subsidiary of Volkswagen constructing an electric vehicle (EV) battery “gigafactory” in St. Thomas, Ontario, has announced a delay in the start of operations to 2029, pushing back the original timeline by two years. PowerCo Canada revealed this update alongside the appointment of Mississauga-based EllisDon Corporation as the general contractor for the factory’s construction.
The decision to postpone the launch to 2029 was attributed to the incorporation of next-generation battery technology in the facility, allowing for scalability in response to evolving market conditions. Despite the delay, PowerCo declined to provide further details regarding the reasons behind it.
Initially planned for a 2027 inauguration, the $7 billion factory received substantial federal government subsidies totaling up to $13 billion when it was first unveiled in 2023. The project was anticipated to generate 3,000 direct employment opportunities and numerous indirect jobs within the region. To accommodate the expected population growth in 2027, surrounding municipalities and the provincial government undertook infrastructure enhancements, such as expanding sewer and road capacities.
Preceding the factory’s announcement, the province authorized the annexation of land from the neighboring Central Elgin municipality to facilitate the development. Construction activities for the gigafactory commenced in October 2025 following major contract awards earlier that year.
St. Thomas Mayor Joe Preston, a strong advocate for the factory as a catalyst for economic advancement in the city, expressed confidence in the project despite the delay. He highlighted the selection of a local Canadian contractor and emphasized the ongoing construction progress as reassuring indicators.
PowerCo has been actively recruiting workers in the St. Thomas area since August 2025, with an estimated 500 individuals currently employed by the company in the vicinity. Mayor Preston underscored the growth of industries in Yarmouth Yards, an industrial park developed by St. Thomas, complementing the battery production sector.
The provincial government welcomed EllisDon’s appointment as the general contractor, recognizing it as a significant step towards creating thousands of direct and indirect jobs across the supply chain. While the delay was not addressed in the ministry’s statement, the focus remains on advancing the gigafactory project to establish Ontario as a leader in innovative battery and automotive production.
Andrew Lawton, the Conservative MP representing Elgin—St. Thomas—London South, expressed disappointment over the delay and raised concerns about Volkswagen’s commitment to the plant. He emphasized the importance of federal government intervention to ensure the project’s progression and safeguard the promised employment opportunities.
The adjustment in PowerCo’s timeline aligns with broader market shifts impacting Ontario’s auto industry, as automakers adapt their EV production strategies in response to changing demand dynamics. Recent developments, such as General Motors halting production at the Chevrolet BrightDrop electric delivery van plant in Ingersoll and Honda canceling plans for an EV facility in Alliston, reflect the evolving landscape of the EV market.
Despite these challenges, Canadian EV sales have shown growth trends, with Statistics Canada reporting a notable increase in new EV purchases compared to the previous year. The fluctuating sales figures indicate a shifting consumer interest in electric vehicles, underscoring the need for automakers and policymakers to navigate this evolving market landscape effectively.
