The opening of a massive Volkswagen electric vehicle battery plant in southwestern Ontario has been pushed back two years until 2029.

PowerCo Canada, a subsidiary of the German automaker, says it is delaying production at the $7-billion factory in St. Thomas, Ont., in order to align the project’s timeline and product strategy with evolving market demand, technological advancements and the Volkswagen Group’s long-term strategy.

It says the later opening date will allow for next-generation battery technology while retaining the flexibility to scale over time as market conditions evolve.

Joel Karlsberg, chief procurement officer for the battery company, says the move is “about getting the pacing right … to protect our long-term investment (and) support regional jobs.”

PowerCo also announced Thursday it has selected Canadian construction firm EllisDon Corp. as general contractor for construction of the factory as it moves into its next phase, which will focus on core infrastructure and structural work.

The plant was announced in 2023, with the federal government committing $700 million in upfront capital costs to build the factory and Ontario kicking in $500 million.

This report by The Canadian Press was first published Sept. 24, 2026.