Volkswagen may be scaling back its electric vehicle (EV) plans in the United States, but north of the border, the company is pressing ahead with one of its most significant EV investments.
Construction of Volkswagen’s PowerCo battery plant in St. Thomas, Ontario continues, even as the automaker winds down production of the Volkswagen ID.4 at its Tennessee factory and delays the introduction of new EV models in the U.S. market.
The timing has raised questions about the long-term demand for batteries from the facility, particularly since the ID.4 was expected to be one of the key vehicles supplied by the plant. With production of that model ending in mid-April, one of the factory’s original customers is effectively off the table, at least for now.
Despite that, Volkswagen’s battery division, PowerCo, insists the project, which broke ground in December 2023 and represents an investment of up to C$7 billion by 2030, remains on track. Company officials say construction is progressing as planned, with no changes to the timeline, budget, or overall scope of the investment.
“Our focus remains on delivering next-generation battery manufacturing in Canada through our landmark investment in the St. Thomas giga-factory,” the company said in a statement to the London Free Press. “This project represents a strategic, long-term commitment to supporting high-quality domestic jobs while strengthening North American supply chains.”
The facility is expected to begin production in 2027 and employ roughly 3,000 workers once fully operational, making it one of the largest EV-related investments in Canada. Local officials say visible progress is already underway, with the structure beginning to take shape as steel framing and foundational work continue on site.
While the ID.4’s cancellation removes a near-term demand source, the plant is still expected to supply batteries for future vehicles, including models under Volkswagen’s revived Scout brand. Those vehicles are slated to be built in South Carolina, although production there is not expected to begin until 2028, leaving a potential gap between battery output and vehicle demand.
Always get the latest - make Drive Tesla your preferred source on Google
Are you buying a Tesla? If you enjoy our content and we helped in your decision, use our referral link to get three months of Full Self-Driving (FSD).Drive Tesla uses affiliate links, which means we may earn a commission if you make a purchase through them, at no additional cost to you. Thank you for your support.
