A subsidiary of Volkswagen constructing an electric vehicle (EV) battery “gigafactory” in St. Thomas, Ontario, has announced a revised operational start date of 2029, delaying the original plan by two years. PowerCo Canada disclosed this update while revealing the appointment of Mississauga-based EllisDon Corporation as the general contractor for the factory’s construction.
The decision to push back the operational commencement to 2029 was made to accommodate upcoming advancements in battery technology. The facility aims to possess the flexibility to expand gradually in response to evolving market conditions, as stated in a press release.
Despite the delay, PowerCo declined to provide a spokesperson for an interview with CBC News regarding the matter. Initially slated for a 2027 launch, the $7-billion factory, supported by up to $13 billion in federal subsidies, was first announced in 2023. The project was anticipated to generate 3,000 direct jobs and numerous indirect employment opportunities in the region.
In preparation for the factory’s establishment, surrounding municipalities and the provincial government have undertaken infrastructure projects to enhance sewer and road capacities for the anticipated population growth in 2027. Prior to the factory’s announcement, the province permitted St. Thomas to annex land from Central Elgin to facilitate the development.
PowerCo Canada awarded major construction contracts for the project in August 2025, kickstarting construction in October 2025 with initial work on the facility’s foundations. St. Thomas Mayor Joe Preston, a strong advocate of the factory as a catalyst for economic growth, expressed confidence in the project despite the two-year setback.
Preston highlighted the significant progress made by PowerCo, citing the employment of approximately 500 workers in the St. Thomas area since August 2025. He emphasized the ongoing construction activities at the site and the workforce already engaged in the project as reasons for his optimism.
Moreover, Preston mentioned Yarmouth Yards, an industrial park in St. Thomas attracting industries complementary to battery production, as a positive development. Provincial officials also welcomed the appointment of EllisDon as the general contractor, acknowledging the milestone in the project’s progression.
However, Andrew Lawton, the Conservative MP representing Elgin—St. Thomas—London South, expressed disappointment over the delay and raised questions about Volkswagen’s commitment to the plant. He emphasized the need for federal government intervention to ensure Volkswagen fulfills its promises and commitments.
The decision to adjust the factory’s timeline aligns with shifts in the EV market, where automakers in Ontario are adapting their plans in response to changing demands. General Motors and Honda are among the companies that have made alterations to their EV production strategies due to fluctuating market conditions.
While there have been setbacks in certain projects, Canadian EV sales have shown encouraging growth, indicating a promising future for the electric vehicle industry in the country.
