Volkswagen Pushes Canadian Battery Plant to 2029 as German Production Scales

Volkswagen battery subsidiary PowerCo has pushed back the opening of its planned manufacturing plant in Ontario by two years to 2029, according to reporting from The Next Web (https://thenextweb.com/news/powerco-ontario-delay-salzgitter) citing an initial report by InsideEVs. Slower-than-expected electric vehicle demand and import tariffs prompted the timeline revision, which coincides with news that the ID Buzz will skip another American model year and return as a 2028 model.

The North American postponement contrasts sharply with the operational ramp of Volkswagen's European battery network. PowerCo commissioned its Salzgitter facility in Germany on Dec. 17, marking commercial production of the group's prismatic nickel manganese cobalt Unified Cells. The new design is roughly 10% denser than its predecessor. Salzgitter begins with an initial capacity of up to 20 gigawatt-hours (GWh) annually, with planned expansion to 40 GWh—an output sufficient for roughly 250,000 cars. Volkswagen Chief Executive Oliver Blume described the company as the first European automaker to establish in-house cell development and manufacturing.

Cells manufactured at Salzgitter are sent to SEAT's Martorell plant in Spain for cell-to-pack assembly, supported by Mobis in Pamplona during the ramp phase. The batteries are scheduled to debut this year in four vehicles: the Volkswagen ID Polo, the ID Cross, the Skoda Epiq, and the Cupra Raval. PowerCo is planned to supply approximately half of the Volkswagen Group's unified cell requirements.

The European production focus comes as Volkswagen records more orders in Germany for electric vehicles than for petrol and diesel models. In response, the automaker canceled extra shifts at Wolfsburg and added shifts at its Emden and Zwickau facilities. The four models powered by Salzgitter cells currently account for roughly 100,000 orders. PowerCo's next European site, located in Valencia, Spain, is scheduled to commence cell production in July 2027.

In North America, trade and manufacturing hurdles have slowed electric deployment. Volkswagen's two assembly plants in Mexico face American tariffs, while its Chattanooga, Tennessee, facility dropped the ID.4 to build only the petrol Atlas and Atlas Cross Sport. The company is currently relying on a joint venture with Rivian for its vehicle software architecture.

The shift in battery production timelines follows significant restructuring at the parent company. Volkswagen closed a German plant last year for the first time in its 88-year history, and unconfirmed reports have cited potential workforce cuts of up to 100,000 positions. With Ontario now deferred to 2029, PowerCo's European supply chain remains operational while its transatlantic footprint faces extended delays.