PowerCo postpones battery cell production in Canada
Volkswagen subsidiary PowerCo has significantly delayed the timeline for its battery cell production in St. Thomas, Canada. Whereas construction was initially set to begin in 2027, the company now expects operations to begin in 2029.
Construction site of PowerCo's cell factory in St. Thomas
Image: PowerCo
PowerCo announced this delay almost in passing, as part of the appointment of a general contractor for the construction project in St. Thomas – more on that below. But what is undoubtedly more significant is that Volkswagen’s battery subsidiary has now drastically pushed back the start of the factory announced in 2023.
The plant in the province of Ontario, which was once set to have an annual production capacity of up to 90 GWh, was originally scheduled to begin operations in 2027. PowerCo also reaffirmed this last year, when three major buildings entered construction. The battery cells produced there are primarily intended for use in the Volkswagen Group’s electric vehicles manufactured in North America, including those of the revived Scout brand, which plans to begin customer deliveries in 2028 – though not yet with cells from St. Thomas.
Instead of 2027, production is now expected to begin roughly two years later: the St. Thomas facility is now projected to start operations in 2029. PowerCo cites several reasons for the delay: shifting market demand, technological advancements, and the Volkswagen Group’s long-term strategy.
VW seeking PowerCo investor
This delayed start to production is ostensibly meant to enable the direct integration of “next-generation battery technology” while ensuring flexibility for future scaling in line with market developments. Additionally, Volkswagen is known to be seeking a partner or investor for PowerCo, which could be another reason for the delay. Recently, there have been rumours that the Chinese cell manufacturer Gotion might join PowerCo’s cell factory in Sagunt, Spain.
Joel Karlsberg, Chief Procurement Officer of PowerCo Canada, clarifies: “The St. Thomas gigafactory remains a cornerstone of our North American strategy. We are continuing to build now while determining how and when the facility scales over time. This is about getting the pacing right—not stepping back—to protect our long-term investment, support regional jobs, and position Canada, Ontario, and St. Thomas to benefit in a dynamic and evolving market.”
A brief note on the new general contractor for the St. Thomas construction site: it is EllisDon, a leading Canadian construction company. According to PowerCo, this appointment allows work on-site to continue, building on the steady progress made since the groundbreaking in 2025. Construction is now entering the core infrastructure and structural phases, which will support future production. Currently, around 60 EllisDon employees are on-site; this number is expected to rise to approximately 1,300 during the peak phase, in addition to further personnel supporting concurrent project activities.