PowerCo delays St. Thomas battery plant opening to 2029

What PowerCo announced

PowerCo Canada said on 24 September 2026 that the plant, first announced in 2023 with a 2027 opening target, is now expected to begin operations in 2029. The company said the later date accommodates next-generation battery technology and keeps flexibility to scale as market conditions evolve. It also named Mississauga-based EllisDon Corporation as general contractor for the next phase of construction. Joel Karlsberg, PowerCo Canada's chief procurement officer, said the move is "about getting the pacing right ... to protect our long-term investment (and) support regional jobs." PowerCo declined to make a spokesperson available to CBC News about the delay.

Construction began in October 2025, after two major contracts were awarded in August 2025.

Why the date matters

The project was announced in 2023 with a promise of 3,000 direct jobs and tens of thousands of indirect jobs across the region. The federal government committed $700 million in upfront capital costs and Ontario $500 million. Ottawa has also promised up to $13 billion in subsidies, far more than its upfront commitment.

St. Thomas and its neighbours did not wait. The province and surrounding municipalities undertook sewer and road projects for a population boom expected in 2027.

Some of the groundwork shows up in employment. St. Thomas Mayor Joe Preston estimated roughly 500 people are currently employed by the company in the surrounding area. PowerCo has been hiring in the St. Thomas area since August 2025 and has a temporary office downtown. Preston told CBC News he was unfazed by the two-year delay, citing the construction underway on site and the workers already employed in the city.

Why the plant slipped

PowerCo said the timeline is in line with "evolving market demand, technological advancements, and the Volkswagen Group's long-term strategy." The delay comes as automakers across Ontario adjust EV plans amid weaker demand. In April 2025, General Motors cited lower-than-expected demand when it halted production of the Chevrolet BrightDrop electric delivery van at its CAMI plant in Ingersoll, laying off hundreds of workers. Honda also delayed a $15-billion EV plant in Alliston before suspending it. Greg Mordue, an associate professor at McMaster University's Booth School of Engineering Practice and Technology, told The London Free Press the move is not surprising given job cuts and falling North American EV demand.

How the subsidy money is released

Economic Development Minister Vic Fedeli said each subsidy agreement with carmakers is unique, but that in general money is released in chunks as companies meet specified milestones. "As long as they met their capital expenditures and as long as they have hired the people they need to hire, they got their money," he said. The London Free Press reported that in the Honda and Umicore cases, little if any government money was paid to the companies.

Ford and the opposition respond

Premier Doug Ford said on 25 September 2026 that he is not worried, and that "what would make me worried is if they said they aren't building." He called Volkswagen's decision to delay rather than cancel a sign of "confidence in Ontario, confidence in the government and the people." Fedeli called the news "nothing but good news" and pointed to shovels in the ground and the EllisDon contract.

NDP Leader Marit Stiles said that with so much taxpayer money on the line if the project is cancelled, the government needs to be clear about what "strings are attached." Liberal MPP Stephanie Smyth said "the writing is on the wall" and accused the government of celebrating a worrying turn.

Conservative MP Andrew Lawton, who represents Elgin-St. Thomas-London South, called news of the delay disappointing and questioned Volkswagen's commitment to the plant. "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 also said he wants to know what the federal government is doing to keep the project on track.

In a written statement to CBC News, a spokesperson for the Ministry of Economic Development, Job Creation and Trade welcomed EllisDon's selection and said the contract "represents a major milestone" toward production. It did not address the two-year delay.

What happens next on site

PowerCo said construction is moving into core infrastructure and structural phases, including mechanical, electrical and plumbing installations, energy and utility systems, and supporting site services. About 60 EllisDon workers are on site now, expected to ramp up to 1,300 at peak.