The Volkswagen subsidiary responsible for the electric vehicle (EV) battery “gigafactory” in St. Thomas, Ont., has announced that operations will now start in 2029, which is two years later than they initially planned.
Power Co Canada shared this update in a news release regarding their decision to hire Ellis Don Corporation from Mississauga, Ont., as the general contractor for the factory’s construction.
“St. Thomas is now expected to begin operations in 2029 to accommodate next-generation battery technology, while retaining the flexibility to scale over time as market conditions evolve,” said a news release.
Power Co did not make anyone available for an interview with CBC News concerning the delay.
The $7-billion factory was originally slated for a 2027 opening and includes potential subsidies from the federal government totaling up to $13 billion. It was first announced in 2023 and was expected to create about 3,000 direct jobs along with many more indirect jobs in the area.
In anticipation of the plant’s arrival, nearby municipalities and the provincial government have been working on infrastructure improvements to enhance sewer and road capacities for what was expected to be a population boom by 2027.
Prior to announcing the plant, the province permitted St. Thomas to annex land from Central Elgin, its neighboring municipality, making space for development.
In August 2025, Power Co Canada revealed that it had awarded two significant construction contracts for this project. Construction kicked off in October 2025, beginning with work on laying foundations for the facility.
St. Thomas Mayor Joe Preston has been an advocate for this factory as a key driver of economic growth for his city and told CBC News that he remains unconcerned about the two-year delay.
Power Co has set up a temporary office in downtown St. Thomas. (Andrew Lupton/CBC News)
“They’ve picked a great local Canadian general contractor and in doing so, they had to adjust the [opening] date,” said Preston.
Since August 2025, Power Co has been hiring staff from around St. Thomas. Preston estimates that about 500 people are currently employed by them locally.
He also mentioned “the number of employees they already have working and living in the city of St. Thomas, the amount of construction that’s going on at that site each and every day” as reasons why he still feels positive about this project.
Preston highlighted Yarmouth Yards as well-a large industrial park developed by St. Thomas-where industries related to battery production are starting to establish themselves.
Provincial officials expressed support for Ellis Don’s selection as general contractor too.
A spokesperson from the Ministry of Economic Development, Job Creation and Trade noted in a written statement provided to CBC News that this contract “represents a major milestone as they work towards the start of production that will create thousands of direct and indirect jobs across the supply chain.”
The ministry’s statement did not address concerns over the two-year delay.
“We look forward to continuing to work with Power Co as they progress on their $7-billion gigafactory in St. Thomas that will position Ontario at the forefront of innovative battery and automotive production for decades to come,” it stated.
Area MP raises concerns
Andrew Lawton, Conservative MP representing Elgin-St. Thomas-London South, expressed disappointment over news about delays while questioning Volkswagen’s commitment toward building this plant.
“I realize that Volkswagen is saying it’s just about pace and not about overall commitment. But ultimately it is about commitment because we were expecting things moving forward at speed we’re just not seeing,” Lawton stated.
Addtionally he wants clarity on what actions federal government plans taking ensure Volkswagen stays committed.
“We saw $13 billion worth federal subsidies put forward alongside promise-the expectation-was around three thousand well-paid local jobs plus all those construction roles involved-all under threat now,” he added.
Evolving EV Market Affects Ontario Auto Plans
The changing market conditions mentioned by Power Co come amid adjustments made by automakers across Ontario regarding electric vehicle production due reduced demand.
This past April General Motors cited lower-than-expected demand when announcing plans halting its Chevrolet Bright Drop electric delivery van production at CAMI Assembly plant Ingersoll leading hundreds layoffs.
Soon after Honda postponed its plans around establishing $15 billion EV facility Alliston back January then ultimately scrapped whole project citing ongoing assessments regarding EV market trends affecting future strategies involved there.
Source link
