Ford Unfazed by Volkswagen Battery Plant Delay in St. Thomas
AI-generated image · Bay Street Wire
Despite a two-year pushback for Canada's largest EV battery facility, the Ontario Premier maintains confidence in the project's completion.
Ontario Premier Doug Ford is not concerned by a two-year delay in the opening of a massive electric vehicle battery plant in St. Thomas, Ont., as first reported by CBC Toronto. Speaking Friday, Ford expressed confidence that the facility—which he described as the fourth largest in the world at 16 million square feet—will be operational within a few years.
PowerCo Canada, a subsidiary of Volkswagen, is responsible for the $7-billion factory. PowerCo attributed the delay, which pushes the opening to 2029, partly to a decrease in market demand for electric vehicles. The company noted that the delay provides an opportunity to integrate next-generation battery technology and announced the hiring of EllisDon as the general contractor for the next phase of construction.
The project involves significant public funding. According to CBC Toronto, the federal government committed $700 million in upfront capital, while the Ontario government provided $500 million. Together, the two levels of government are providing $1.4 billion, including some loans, with up to $13 billion in government subsidies tied to production output available.
However, the delay has drawn criticism. NDP Leader Marit Stiles stated the news is not positive for workers or spinoff industries in a region that has already seen substantial layoffs. Liberal legislator Stephanie Smyth expressed concern that the delay could be a precursor to a shutdown, while Conservative MP Andrew Lawton noted the plant was originally expected to operate by 2027.
This setback follows several other pivots in Ontario's EV supply chain. CBC Toronto reports that Honda delayed its Alliston project and Umicore paused plans for a cathode plant. Additionally, General Motors ended production of BrightDrop vans in Ingersoll, and Ford delayed EV production in Oakville. In Windsor, NextStar Energy pivoted to storage batteries, and LG has since bought out Stellantis' share of that operation.