PowerCo now expects its battery plant in St. Thomas to begin operations in 2029. That is two years later than Volkswagen said when it announced the plant in 2023.
The new date came near the end of a PowerCo Canada news release on Thursday, September 24th. Most of the release was about something else: PowerCo has hired EllisDon, a construction company based in Mississauga, as the general contractor for the plant.
What PowerCo said
The release says PowerCo is lining up the project’s timeline “with evolving market demand, technological advancements, and the Volkswagen Group’s long-term strategy.” It says the St. Thomas plant “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.”
Joel Karlsberg, PowerCo Canada’s chief procurement officer, said the company is “continuing to build now while determining how and when the facility scales over time.” He described the change as “getting the pacing right” and said PowerCo is “not stepping back.”
Work on the site goes on. About 60 EllisDon workers are there now, and PowerCo expects that to grow to roughly 1,300 at the busiest point of construction. This first phase includes the shell of the production building, mechanical, electrical and plumbing work, energy and utility systems, and site services.
What the release does not say
Volkswagen’s April 2023 announcement said the plant could make up to 90 gigawatt hours of batteries a year “in the final expansion phase,” and could create up to 3,000 jobs at the factory.
Thursday’s release gives no jobs number and no production capacity. It does not say what “operations” will include in 2029, how large the plant will be when it starts in 2029, or when it might reach full size. It still describes the plant as an investment of up to $7 billion.
What local leaders say
In an interview with LocVox on Friday, Mayor Joe Preston said the City learned of the new date about a day before PowerCo announced it. He tied the change to the arrival of a general contractor, saying it is up to the contractors “how long it will take to finish that large of a project.” He also said, “We had a bad construction winter.” PowerCo’s release, by contrast, ties the new date to the market and to battery technology, not to the construction schedule.
Preston told CBC News on Thursday that he was unfazed by the delay, and estimated that about 500 people now work for PowerCo itself in the area.
Andrew Lawton, the Conservative MP for Elgin-St. Thomas-London South, told CBC News the delay was disappointing. “I realize that Volkswagen is saying it’s just about pace and not about the overall commitment. But ultimately, it is about the commitment because we were expecting this to be moving forward at a speed that we’re just not seeing,” he said. He said he wants to know what the federal government is doing to keep Volkswagen committed.
The public money
When Ottawa and Ontario announced their support in April 2023, the Prime Minister’s Office said the plant would be complete in 2027. It said federal production support would be paid “only for what is produced and sold” and would “phase out by 25 percentage points every year beginning in 2030 (after 2032, the credit would be eliminated).” It put the federal total at between $8 billion and $13.2 billion, “depending on production levels.” Ontario promised $500 million in direct incentives.
Neither government has said whether the new 2029 date changes those agreements, which have not been made public. CBC News reported that Ontario’s economic development ministry sent a statement welcoming the EllisDon news that did not address the delay.
Preston told LocVox he isn’t seeing any penalties for PowerCo “on the surface of this,” and noted that much of the government support depends on reaching production goals. “If we’re not at production yet, those goals don’t click in for them,” he said. He said the delay does not affect the City in the same way.
A slower market for electric cars
Volkswagen said in 2023 that the St. Thomas cells would go into Volkswagen Group electric vehicles in North America. The plant is designed as six production sections that can be added over time.
The company signalled a slower build as early as March 2025. Its group finance chief, Arno Antlitz, said then that PowerCo would hold off on some of the St. Thomas sections “because we are planning less electric cars,” though it still planned to start production in 2027, Automotive News reported.
This April, Volkswagen said it would end production of the ID.4 electric SUV at its plant in Chattanooga, Tennessee, citing a challenging U.S. electric vehicle market, CNBC reported. The U.S. government had ended a $7,500 tax credit for electric vehicle buyers the previous fall. Volkswagen said a future version of the ID.4 is planned for North America but gave no timing.
Other Ontario battery projects have pulled back too. In May, Honda indefinitely suspended its planned $15-billion electric vehicle complex in Ontario, citing lower demand, and said it had not received any of the government money promised for it. The Windsor battery plant now owned by LG Energy Solution is running, but for now it makes cells for energy storage, not cars.
What St. Thomas planned around 2027
The City’s long-range growth forecasts assumed the plant would begin operating in 2027.
A 2024 Growth Analysis Study updated the City’s forecasts “to consider the Volkswagen EV battery plant set to begin operations in 2027,” says a residential land needs report that council accepted on August 10th. That study counted on the plant employing 3,000 people directly. It raised the City’s population forecast to 79,500 people by 2051, which is 14,400 more than the 2022 forecast.
The same study expects demand for new homes to peak around 2031, “corresponding to the completion and operation” of the plant. Based on those forecasts, the land needs report found St. Thomas needs about 283 more hectares of land for future homes. The City’s Official Plan update, now under way, will look at where that growth should go.
The St. Thomas-Elgin 10-year housing and homelessness plan, which council approved on September 14th, makes the same link. It forecasts “an even greater spike” in new homes from 2026 to 2031, one that “coincides with” the battery plant and other large employers being built and opening. It says St. Thomas could see up to 745 new homes a year over the next 10 years, compared with a 30-year average of 510.
None of these documents says what would change if the plant opened later.
Asked whether the City will revisit those forecasts, Preston did not say directly. He answered that St. Thomas is “still in a housing crisis” and needs homes for the jobs coming to the Yarmouth Yards industrial park. “I think we’ll look back and maybe laugh at ourselves a little bit that we’re taking a little longer to build the plant than we hoped,” he said.
LocVox has asked PowerCo, the City and MP Lawton’s office for more detail and will update this story with their answers.
Earlier coverage: St. Thomas Is Building Its Longest Rail Yard Yet, Right Next to the PowerCo Plant and Highway 3 Is Being Doubled Through St. Thomas
Update - September 25, 2026, 3:39 a.m. ET: Added a section on the wider slowdown in electric vehicles, including Volkswagen ending ID.4 production in Tennessee and other Ontario battery projects that have pulled back.
Update - September 25, 2026, 6:47 p.m. ET: Added comments from Mayor Joe Preston’s interview with LocVox and tightened the article around them.
Sources: PowerCo Canada, “PowerCo Advances St. Thomas Gigafactory with EllisDon Appointment and Phased Development Approach” (September 24, 2026) · Volkswagen Group, “Volkswagen and PowerCo SE will build their largest cell factory to date in Canada” (April 2023) · City of St. Thomas Council agenda, August 10, 2026 (Report PD-45-26, Residential Land Needs)
By Anthony Zruna · About the LocVox Newsroom
