Volkwagen’s EV battery plant project in St. Thomas, Ont., will proceed as planned despite challenges that the company faces and a slowdown in EV sales, say multiple reports.

Officials with Volkswagen subsidiary PowerCo have reaffirmed the company’s commitment to complete the plant on schedule.

“The ramp-up of gigafactory St. Thomas is fully on track, PowerCo Canada said in an email to the London Free Press. “Site preparation has already been completed. We aim to produce the first cells in 2027, followed by demand-based ramp-up of mass production.”

“While PowerCo has yet to finalize its supplier partnerships. Umicore, one of PowerCo’s potential suppliers, recently announced a delay in its proposed Kingston, Ont., facility, which would supply cathode materials crucial for battery production.

Brendan Sweeney, director of the Trillium Network for Advanced Manufacturing, noted in an interview with the Free Press that a delayed opening in St. Thomas wouldn’t be surprising, though Volkswagen has indicated its intention to proceed as planned.

“There may be speculation [about the PowerCo opening] and if it got pushed back to 2028, it wouldn’t be a huge shock,” Sweeney told the Free Press.

Sweeney added that the plant’s operation will depend largely on the timelines of Volkswagen’s EV production at its factories in Chattanooga, Tenn., and South Carolina, which manufacture the ID.4 and Scout models, respectively.

“The indicator of when St. Thomas will ship product will be less about suppliers, but more about the timelines and production for Chattanooga and the Scout plant in South Carolina,” Sweeney told the Free Press.

Volkswagen has already hired close to 100 staff in St. Thomas as it builds its administrative team, the reports say. According to Sweeney, while the EV sector faces challenges, automakers recognize the need to solidify their North American supply chains, particularly with Chinese EV companies expected to enter the market by 2025.

“They have to build the supply chain here,” he told the Free Press. “If they don’t, someone will come in and eat their lunch.”:

From what the St. Thomas Economic Development Corporation has observed, plans for the PowerCo plant remain steady.

“From what we are hearing, everything is on track,” Sean Dyke, the organization’s CEO, told the Free Press. “We’re powering forward and they have a building permit to start construction. Everything is in order.”

Dyke noted that several potential suppliers are considering sites in the St. Thomas area and are awaiting Volkswagen’s decisions before committing to construction.

“But that’s not the full extent of interest,” he told the Free Press. “It’s going to happen, we’re shifting to EVs, but it may be a long process,” he added.

Rendering: Volkswagen Canada