Canadian Government’s Investment in Major Battery Factories to Exceed Expectations

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According to Reuters, on November 17th, the Parliamentary Budget Officer (PBO), an independent budget watchdog in Canada, stated that the support for the construction of three major electric vehicle battery factories in Canada will exceed the initial cost announcement by about 16%.

These three factories refer to those that will be built by Volkswagen, Stellantis, LG Energy Solution, and Sweden’s Northvolt. Based on the assessment of PBO officials, the total cost supported by the Canadian federal and provincial governments for these three battery factories will reach 43.6 billion Canadian dollars (approximately 31.75 billion US dollars) over a period of 10 years, which is 15.6% higher than the previously announced 37.7 billion Canadian dollars.

As the world seeks to reduce carbon emissions, Canada has committed to providing billions of dollars in incentives to attract companies at all levels of the electric vehicle supply chain. Canada, with its large mining industry, can extract minerals crucial for battery production.

Francois-Philippe Champagne, the Canadian Minister of Innovation, is responsible for attracting battery factories to Canada. Champagne believes that the government’s investment in battery factories has a broader economic impact on the supply chain, which is not reflected in the PBO report.

In an email statement, Champagne said, “The economic benefits generated by these investments will far exceed our government’s contribution. Moreover, the report does not emphasize that over two-thirds of the government support is conditional and will be paid over ten years.”

In April this year, Canada agreed to provide up to 13 billion Canadian dollars in manufacturing tax breaks and 700 million Canadian dollars in subsidies to attract the German automaker Volkswagen to establish a battery factory in the country. Subsequently, a joint venture battery factory between Stellantis and LG Energy Solution renegotiated with the Canadian government for similar subsidies as Volkswagen. In September, Northvolt announced plans to open a 5.2 billion US dollar gigafactory in Quebec, Canada, with Northvolt investing 3.2 billion dollars, and the federal and local governments in Canada each contributing 1 billion dollars.

[Source – 上海有色网] 加拿大政府对主要电池工厂的投资将超出预期

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