Ontario EV battery plant delayed by Volkswagen subsidiary

A subsidiary of German automaker Volkswagen is delaying its Ontario-based electric vehicle (EV) battery plant.

The company, called PowerCo Canada, announced last week that the St. Thomas, Ont., plant will start operations in 2029 instead of the original 2027 target. It said the delay would allow the plant to “accommodate next-generation battery technology.”

PowerCo spokeswoman Tegan Versolatto told the Globe and Mail that the company was using a “phase approach” in order to make sure the plant can meet future market needs and technology advances.

However, there were mixed reactions to the news about the delay and concerns over the impact on the possible 3,000 jobs it will offer, especially amid headwinds impacting the industry.

For one, there’s the anti-EV sentiment coming out of the U.S., with the federal government removing EV purchase incentives. Per the Globe, 5.8 per cent of U.S. new car sales were EVs in Q2 2026, indicating softer demand.

Canada, on the other hand, has more interest in EVs, but being a smaller market, it might not be enough to move the needle. Canadian data from Statistics Canada says 11 per cent of new sales in July were EVs. Canada’s new EV incentives are likely a factor, as is the Iran conflict, which is driving up gas prices and pushing people toward EVs and hybrids.

Another factor: several Canadian EV projects have already been canned, despite significant backing from taxpayers. Honda recently shelved a $15 billion EV plant, GM axed its EV delivery van manufacturing at its Ingersoll, Ont. plant, plans to build an EV battery plant in Quebec fell apart in 2025, just to name a few.

In light of all this, Ontario NDP Leader Marit Style expressed concern about the delay to the Globe, while Premier Doug Ford and ministers were optimistic about the plant. Similarly, St. Thomas Mayor Joe Preston told the Globe that he’s still excited about the plant and drives by it every day.

Notably, PowerCo shared the delay alongside the news that Canadian construction company EllisDon would be the general contractor for the next construction phase.

Header image credit: PowerCo

Source: The Globe and Mail