The construction of an electric vehicle (EV) battery “gigafactory” in St. Thomas, Ont., by a Volkswagen subsidiary is now set to commence operations in 2029, which is a two-year delay from the initial schedule. PowerCo Canada disclosed this information in a press release when they appointed the Mississauga-based EllisDon Corporation as the general contractor for the factory’s construction.
The decision to push the operational start to 2029 was made to align with advancements in next-generation battery technology and allow for flexibility in scaling according to evolving market conditions, as per the press release. PowerCo declined to provide a spokesperson for an interview regarding the delay.
Originally planned for a 2027 launch, the $7 billion factory, supported by up to $13 billion in federal subsidies, was announced in 2023 and anticipated to create 3,000 direct jobs along with numerous indirect job opportunities in the region.
Preparations for the factory’s establishment led surrounding municipalities and the provincial government to undertake infrastructure enhancements to accommodate the anticipated population growth in 2027. Prior to the factory’s announcement, St. Thomas was permitted by the province to annex land from Central Elgin to facilitate the development.
Construction activities for the project commenced in October 2025 after PowerCo Canada awarded two significant construction contracts in August 2025. St. Thomas Mayor Joe Preston expressed confidence in the project, emphasizing the positive impact on economic growth and job creation in the city.
PowerCo has been actively recruiting workers in the St. Thomas area since August 2025, employing an estimated 500 individuals locally. Preston highlighted the ongoing construction activities and the presence of PowerCo employees in the city as indicators of progress and commitment to the project.
EllisDon’s selection as the general contractor was also welcomed by provincial officials, indicating that the contract signifies a major step towards production commencement, which is expected to generate thousands of direct and indirect job opportunities across the supply chain.
While the two-year delay was not addressed in the ministry’s statement, it emphasized the collaboration with PowerCo to establish the gigafactory, positioning Ontario as a leader in innovative battery and automotive production for the foreseeable future.
Conservative MP Andrew Lawton expressed disappointment over the delay, questioning Volkswagen’s dedication to the plant and urging government intervention to ensure the project’s continuity and job creation promises.
The market conditions referenced by PowerCo reflect adjustments in EV production plans by automakers in Ontario due to shifting demand patterns. General Motors and Honda have both made changes to their production plans in response to evolving EV market dynamics, while Canadian EV sales have demonstrated growth in recent months.