A subsidiary of Volkswagen, responsible for constructing an electric vehicle (EV) battery “gigafactory” in St. Thomas, Ontario, has announced a revised operational start date of 2029, which is two years later than the initial plan. PowerCo Canada disclosed this information along with the appointment of Mississauga-based EllisDon Corporation as the general contractor for the factory’s construction.
The delay in the commencement of operations in St. Thomas to 2029 is attributed to the incorporation of advanced battery technology and the need to adapt to changing market dynamics, as stated in a press release. Despite requests for an interview with CBC News, PowerCo declined to provide a spokesperson for comments on the delay.
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 expected to generate 3,000 direct employment opportunities and numerous indirect jobs in the region.
In preparation for the factory’s establishment, neighboring municipalities and the provincial government initiated infrastructure projects to enhance sewer and road capacities, anticipating a surge in population by 2027. Before the factory’s announcement, St. Thomas was permitted by the province to annex land from Central Elgin to facilitate the development.
Construction activities for the project began in October 2025 after PowerCo Canada awarded two major construction contracts in August of the same year. St. Thomas Mayor Joe Preston expressed confidence in the project despite the delay, emphasizing the positive impact on the city’s economic growth.
Regarding workforce recruitment, PowerCo has been employing individuals in the St. Thomas area since August 2025, with an estimated 500 workers currently engaged in the company’s operations. Mayor Preston highlighted the ongoing construction activities at the site and the presence of employees within the city as factors bolstering his confidence in the project’s success.
Additionally, the selection of EllisDon as the general contractor was welcomed by provincial officials, anticipating the creation of numerous job opportunities. The Ministry of Economic Development, Job Creation and Trade commended the contract as a significant milestone towards establishing the gigafactory, positioning Ontario as a leader in innovative battery and automotive production.
However, concerns have been raised by Andrew Lawton, the Conservative MP for Elgin—St. Thomas—London South, regarding the delay and Volkswagen’s commitment to the plant. Lawton emphasized the importance of federal government involvement to ensure the project’s progress and job creation promises.
The adjustment in the operational timeline aligns with market shifts affecting Ontario’s auto industry, as automakers recalibrate their EV production strategies in response to evolving demand dynamics. Notable instances include General Motors halting production at the CAMI Assembly plant and Honda reconsidering its plans for an EV plant in Alliston. Despite these challenges, the Canadian EV market has displayed growth, with increasing sales figures reported in recent months.