Volkswagen subsidiary delays opening of Ontario battery plant to 2029

The company behind the plan for a massive battery plant in southwestern Ontario says the facility is expected to begin operations in 2029, two years later than initially planned.

PowerCo, founded by automaker Volkswagen, is currently building a gigafactory in St. Thomas, Ont., to produce batteries for its growing electric vehicle range.

On Thursday, the company announced the hiring of the construction firm EllisDon Corporation as the general contractor for the new plant.

In a news release, PowerCo said the appointment “enables work on-site to continue building on steady progress since groundbreaking in 2025.”

“Construction is now moving into core infrastructure and structural phases that will support future production.”

In an email statement to Global News, a spokesperson for PowerCo said the phased approach is not a sign of stepping back, but about ensuring each step of the project is completed efficiently and effectively.

“It preserves flexibility while supporting skilled trades, regional suppliers and economic activity in Southwestern Ontario,” the spokesperson said.

The first phase of development includes core building structures and site-wide infrastructure, the press release said. That includes mechanical, electrical and plumbing installations, energy and utility systems, and supporting site services.

The company said approximately 60 EllisDon workers are currently on site and that is expected to ramp up to 1,300 workers at peak.

The federal government previously said the company’s first battery plant outside of Europe will create 3,000 direct and 30,000 indirect jobs and contribute $200 billion to the Canadian economy in the coming decades.

In August 2025, PowerCo announced it had awarded two construction contracts for work on the new facility. Construction began in October.

The battery plant is being built under the cloud of tariffs and a changing vehicle market. Over the past year, Honda has postponed its plans for an EV plant in Canada and GM paused production of its electric vehicle vans.

These announcements came after the Trump administration levied tariffs on Canadian vehicles and removed subsidies to boost electric vehicles.

PowerCo said the project’s timeline is in line with “evolving market demands, technological advancements and Volkswagen Group’s long-term strategy.”