The subsidiary of Volkswagen responsible for constructing an electric vehicle (EV) battery “gigafactory” in St. Thomas, Ontario, has announced a revised operational timeline of 2029, delayed by two years from the original plan. PowerCo Canada disclosed the adjustment while revealing the selection of Mississauga-based EllisDon Corporation as the general contractor for the factory’s construction.
The decision to push back the start date to 2029 is attributed to the incorporation of next-generation battery technology and the need for flexibility to adapt to evolving market conditions, as mentioned in a press release. Despite the delay, PowerCo declined to provide further details to CBC News.
Initially slated for a 2027 launch, the $7 billion facility, supported by up to $13 billion in federal subsidies, was first announced in 2023 with projections of creating 3,000 direct jobs and numerous indirect employment opportunities in the area. To accommodate the expected population growth in 2027, surrounding municipalities and the provincial government had undertaken infrastructure projects to enhance sewer and road capacities.
Preparations for the factory’s establishment included annexing land from Central Elgin by St. Thomas and awarding major construction contracts in August 2025. Construction commenced in October 2025, focusing on laying the facility’s foundations. St. Thomas Mayor Joe Preston, a strong advocate for the project’s economic benefits, expressed confidence in the venture despite the delay.
PowerCo has already commenced hiring activities in the St. Thomas region since August 2025, with an estimated 500 individuals currently employed by the company. Mayor Preston highlighted the ongoing construction work and the existing workforce as indications of the project’s progress. Additionally, he mentioned Yarmouth Yards, an industrial park in St. Thomas attracting industries complementary to battery production.
The selection of EllisDon as the general contractor was welcomed by provincial officials, emphasizing the significant milestone towards creating numerous jobs in the supply chain. The Ministry of Economic Development, Job Creation, and Trade expressed excitement about Ontario’s positioning in innovative battery and automotive production through the gigafactory.
However, concerns were raised by Conservative MP Andrew Lawton regarding the delay and Volkswagen’s dedication to the plant. Lawton emphasized the importance of federal support to ensure the project’s continuation and the fulfillment of job creation expectations.
Market dynamics affecting the electric vehicle sector prompted PowerCo’s timeline adjustment, aligning with shifts in Ontario’s auto manufacturing landscape. Recent developments, such as General Motors halting Chevrolet BrightDrop van production due to lower demand and Honda canceling a planned $15 billion EV plant, reflect the evolving industry trends.
Despite these challenges, Canadian EV sales have shown promising growth, with a notable increase in purchases compared to the previous year. The fluctuating sales figures indicate a shifting consumer demand for electric vehicles in the Canadian market.