Volkswagen subsidiary delays opening of $7B St. Thomas, Ont., battery plant

The Volkswagen subsidiary building an electric vehicle (EV) battery “gigafactory” in St. Thomas, Ont., says the facility is now expected to begin operations in 2029, two years later than originally planned.

PowerCo Canada made the announcement in a news release about hiring Mississauga, Ont.-based EllisDon Corporation as the general contractor for construction of the factory.

“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.

PowerCo declined to make a spokesperson available for an interview with CBC News about the delay.

Originally scheduled for a 2027 opening, the $7-billion factory — with a promise of up to $13 billion in subsidies from the federal government — was first announced in 2023. It was estimated it would result in the creation of 3,000 direct jobs and tens of thousands of indirect jobs in the region.

To prepare for the arrival of the plant, surrounding municipalities and the provincial government have undertaken infrastructure projects to increase sewer and road capacity for the population boom that was expected in 2027.

Before the plant was announced, the province allowed St. Thomas to annex land from the neighbouring municipality of Central Elgin to make room for the development.

In August 2025, PowerCo Canada announced it had awarded two major construction contracts for the project. Construction began in October 2025, with work starting on the foundations for the facility.

St. Thomas Mayor Joe Preston, who has championed the factory as a major driver of economic growth for his city, told CBC News he’s unfazed by the two-year delay.

“They’ve picked a great local Canadian general contractor and in doing so, they had to adjust the [opening] date,” said Preston.

PowerCo has been hiring workers in the St. Thomas area since August 2025. Preston estimates roughly 500 people are currently employed by the company in the surrounding area.

He also cited “the number of employees they already have working and living in the city of St. Thomas, the amount of construction that’s going on in that site each and every day” as reasons for maintaining confidence in the project.

Preston also pointed to Yarmouth Yards, a large industrial park developed by St. Thomas, which is being populated by industries that are complementary to battery production.

Provincial officials also welcomed EllisDon’s selection as general contractor.

In a written statement to CBC News, a spokesperson for the Ministry of Economic Development, Job Creation and Trade said the contract “represents a major milestone as…