Historic Investment in Electric Vehicle by Canadian Leaders

Historic Investment in Electric Vehicle

A momentous announcement done against the backdrop of Quebec’s commitment to a green economy. Canadian Prime Minister Justin Trudeau and Premier François Legault have unveiled what they’re calling a “historic” investment in Electric Vehicle.

The venture involves a massive new manufacturing facility to be constructed by Swedish battery giant Northvolt. It is spanning an impressive 170 hectares on Montreal’s South Shore, equivalent to over 300 football fields.

The facility is projected to boast an annual battery cell manufacturing capacity of up to 60 gigawatt-hours (GWh). This is sufficient to power approximately one million electric vehicles each year. The first phase of this ambitious endeavor is slated for completion by the end of 2026. It will also incorporate facilities for producing cathode active materials, a critical component of electric vehicle batteries, and recycling used batteries.

A key highlight of the project is the anticipated creation of up to 3,000 jobs. However, this endeavor comes at a substantial cost. It is combined with investment of $2.7 billion in taxpayer funds from the federal and provincial governments. Additionally, there will be government production incentives totaling up to $4.6 billion, with one-third originating from Quebec, contingent on similar incentives being maintained in the United States.

This announcement forms part of a series of initiatives aimed at bolstering Canada’s electric vehicle industry. While such projects have raised questions due to their substantial public financing. Experts argue that this financial support is essential to compete effectively in the fiercely competitive global market.

Partnership with Quebec

Just last month, the Canadian government, in partnership with Quebec, disclosed an investment exceeding $640 million for a new Ford electric vehicle plant in Bécancour, Quebec. The federal government has also committed billions in Ontario to rescue the Stellantis-LG electric vehicle battery plant in Windsor and to subsidize the Volkswagen battery plant in St. Thomas.

Nonetheless, a recent assessment by the Parliamentary Budget Officer concluded that it will take two decades for the federal and Ontario governments to recoup their $28 billion production subsidies for these two plants. Greig Mordue, Chair of Advanced Manufacturing Policy at McMaster University’s School of Engineering and a former Toyota executive, noted that government support has long been a tradition in the auto industry.

In this week’s Quebec announcement, Mordue commented, “We’ll see where this shakes out, but we paid a big price”. Our industrial policy now consists of one tool, and that is a chequebook, and that’s where we are today.” The venture underscores Canada’s determination to play a pivotal role in the burgeoning electric vehicle sector. Even as it grapples with the financial complexities of such ambitious projects. This have made Investment in Electric Vehicle a historic movement.

Sumann Senguptaa

Learn More →

Leave a Reply

Your email address will not be published. Required fields are marked *