German automotive giant Volkswagen (VLKAF) is delaying production at a large electric vehicle battery plant in Canada until 2029.
Battery production at the $7-billion facility in St. Thomas, Ontario was expected to begin in 2027.
Volkswagen says that the delay will give it more time to align the project with evolving market conditions and demand for electric vehicles.
The company also said that the later opening will give it time to develop next-generation battery technologies and the ability to scale over time as market conditions evolve.
The plant in southern Ontario was announced in 2023, with Canada’s federal government committing $700 million in capital costs to build the factory and Ontario providing $500 million.
The delay in Canada comes as Volkswagen undertakes a massive restructuring in its home market of Germany.
Volkswagen has announced plans to close several of its manufacturing plants in Germany and layoff more than 100,000 workers in what it says is the biggest change in the company’s history.
Europe’s largest automaker is undertaking a “Future Plan 2030” restructuring strategy. The centerpiece of the transformation is 100,000 job cuts, including management roles.
Volkswagen has said the cuts are needed as it struggles with rising competition and tariff pressures.
The company has also announced plans to end corporate bonuses starting in 2027 as it looks to save money.
Management at Volkswagen has said they face rising competition from Chinese automakers. The company is also struggling due to a costly pivot to electric vehicles that didn’t pan out.
On Sept. 21, Volkswagen’s declining stock was removed from Euro Stoxx 50 index, a leading equity bourse.
Shares of Volkswagen have declined 62% in the last five years to trade at Euros 71.30 ($81.33 U.S.) per share.
