Volkswagen’s new EV battery factory in Ontario will now open two years later than planned, even though the company had previously expressed confidence about starting production next year.
On Friday, Ontario’s Minister of Economic Development, Job Creation and Trade Vic Fedeli described the news as “extremely exciting,” while recognizing that opinions may vary. Fedeli isn’t concerned that the delay might lead to canceling the $7 billion battery plant project, highlighting that a construction firm has been hired for its development.
On Thursday, Power Co, which was established by Volkswagen, stated that bringing a construction firm on board “enables work on-site to continue building on steady progress since groundbreaking in 2025.”
“You can’t expect that building to open before 2029 when they’re starting in mid-26. So if you’ve been following along with it, you realize that every day that they don’t start construction is a day that they don’t start production,” Fedeli said.
“So, to me, it’s a great news story. The building is being built. The investment is being made.”
The Power Co factory was announced in 2023 and supported by a $500 million investment from the province and $700 million from the federal government. Its batteries – currently produced at its facilities in Germany – are compatible with most Volkswagen EV models. Instead of creating different batteries for each model, 80 percent of the company’s lineup uses the same battery.
In recent years, several major automakers have scaled back their multi-billion-dollar initiatives in Ontario. In May 2025, Honda Motors halted and ultimately canceled its plans for developing an EV supply chain in Ontario due to “changing conditions” surrounding its $15 billion investment.
The trade tensions between Canada and the US have escalated recently and added pressure to the industry.
Also in 2025, General Motors closed its plant in Ingersoll, Ont., which produced its Brightdrop Zevo electric delivery van, resulting in layoffs for 500 employees.
– With files from Darius Snieckus
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