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If your 2027 to 2029 bill of materials assumes locally made battery cells in North America, the last week of September gave you a reason to reopen the spreadsheet.
On September 24, 2026, PowerCo Canada, the battery subsidiary of Volkswagen Group, confirmed that production at its planned gigafactory in St. Thomas, Ontario, will start in 2029. That is roughly two years later than the originally planned 2027. The announcement came the same day PowerCo named Canadian builder EllisDon as general contractor, so this is not a cancellation. Construction continues, but the supply timeline has moved.
For procurement teams, fleet operators and anyone planning an electrified product launch, the delay is a concrete data point on a bigger question: how much North American cell capacity can buyers actually count on, and when?
What Happened at the St. Thomas Plant
According to The Canadian Press and trade outlets:
- The plant was announced in April 2023. The Canadian federal government committed CA$700 million in upfront capital support, and the province of Ontario added CA$500 million.
- The project is described as roughly CA$7 billion, with planned annual capacity of up to 90 GWh.
- Cell production was originally scheduled for 2027, a timing PowerCo reaffirmed as recently as 2025 while major buildings went up. The new start date is 2029.
- The cells are intended mainly for Volkswagen Group EVs built in North America, including the revived Scout brand. Scout has been reported to plan customer deliveries in 2028, so its early vehicles will not use St. Thomas cells.
- PowerCo has been looking for partners or investors for its battery business, and its latest announcement named no specific partner for St. Thomas.
PowerCo described the change as “getting the pacing right.” Chief procurement officer Joel Karlsberg said the company is continuing to build now while deciding how and when the facility scales. The stated reasons are aligning the timeline with market demand, technology change and group strategy, and leaving room for next-generation battery technology.
Why a Plant Under Construction Can Still Slip Two Years
A delay at a site that is actively being built suggests the bottleneck is not construction. Four factors commonly sit behind decisions like this, and all four are consistent with PowerCo’s statement:
- Demand growth. EV adoption in North America is still rising, but it has often come in below the forecasts used to justify gigafactory pipelines. Building 90 GWh ahead of firm orders could mean years of low utilization.
- A moving technology target. PowerCo says the later date lets it incorporate next-generation battery technology. Locking in a cell format too early risks building a line that buyers want superseded by 2029.
- Capital discipline. Volkswagen Group has been cutting costs and seeking partners to share battery investment. Pushing the start back spreads capital spending and lowers the risk of an oversized, under-used asset.
- No confirmed anchor partner for this site. The plant was planned largely around group demand, and Scout’s timing no longer lines up with a 2027 start. Without committed multi-brand offtake, scaling aggressively is harder to justify.
This looks like a pacing decision by a company that would rather delay a plant than run it below capacity. That can be rational for PowerCo, but it shifts timing risk onto everyone downstream who planned around the original date.
What the Delay Means for Battery Buyers
If you source cells or packs, whether for passenger EVs, e-motorcycles, e-bikes, three-wheelers or energy storage systems, three points follow.
Treat "local cells by 2027" as an assumption, not a commitment
Even a government-supported project with active construction moved by two years. Any sourcing plan that depends on a new North American line starting on its announced date should carry a contingency. Ask suppliers whether the quoted capacity is in production today, under construction or only announced. Those are three very different things.
Consider dual-region sourcing
Buyers with the least exposure to this kind of delay are often those who already qualify mature, high-volume production alongside a domestic option. Established Asian cell and pack capacity is running now and, in many cases, offers shorter and more predictable lead times, even after logistics, duties and compliance are priced in. For a 2027 or 2028 launch, a proven line that ships can be worth more than a new line that may not be ready.
Put timing risk into the contract
If you commit to a supplier tied to new capacity, negotiate milestone-based volume commitments, lead-time guarantees and a qualified second source, rather than a take-or-pay schedule built around a plant’s announced start date.
Announced Capacity vs. Capacity Actually Running
Two numbers are often confused. The first is announced pipeline capacity, the sum of every gigafactory that companies have said they might build. The second is capacity actually in production. In North America the gap between them is large, and 2025 and 2026 brought a series of timeline adjustments, pauses and partner searches across the industry as demand growth lagged earlier forecasts and financing costs stayed high.
St. Thomas is one of the clearer examples because the project is well funded, publicly backed and visibly under construction, and it still moved.
What to Do This Quarter
- Re-run your 2027 to 2029 sourcing plan with local cell availability pushed to the later date as a realistic scenario, not the base case.
- Confirm in writing which of your suppliers’ quoted lines are producing today and which are planned.
- Qualify at least one mature, currently producing source. An experienced custom lithium battery pack manufacturer with running lines can help de-risk a launch that will not wait for a new gigafactory.
- If cell chemistry is part of your decision, review how the main options compare in our guide to LFP vs NCA batteries.
- Add delivery-timing and second-source terms to new supply agreements.
North American battery manufacturing is still being built, and projects like St. Thomas will eventually add real supply. The lesson of the 2029 delay is not that local capacity has failed. It is that the transition is uneven, and procurement plans work best when built on capacity that is running today, with new factories treated as upside.
Frequently Asked Questions
PowerCo moved production from 2027 to 2029 to align the project with market demand, technology developments and Volkswagen Group's long-term strategy, and to leave room for next-generation battery technology. It described the change as "getting the pacing right," and it named EllisDon as general contractor the same day, so construction is continuing.
No. Construction continues with EllisDon as general contractor, and the plant remains part of Volkswagen's North American battery plans. What changed is the production start date, from 2027 to 2029.
When the roughly CA$7 billion project was announced in 2023, the Canadian federal government committed CA$700 million in upfront capital support and Ontario committed CA$500 million. The site is planned for up to 90 GWh of annual capacity.
It pushes realistic local cell supply from this project to 2029, so new-line timelines should be treated as uncertain. Buyers should separate capacity that is in production, under construction and only announced, qualify mature producing sources, and build timing protections and second sources into supply contracts.
Not in the early years. Scout has been reported to plan deliveries from 2028, while St. Thomas production is now expected in 2029. The plant is still intended to supply Volkswagen Group EVs in North America as it scales.
Sources
- The Canadian Press via CTV News, “Volkswagen delays production at Ontario EV battery plant until 2029”, September 24, 2026.
- EVMagz, “PowerCo Delays Volkswagen Battery Plant In Canada to 2029”, September 26, 2026.
Figures reflect company and government statements as reported through September 29, 2026. Planned capacity and dates are forward-looking and subject to change, and they are not guarantees of supply.
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