Canada may be keen on throwing its support behind initiatives related to the push towards a carbon-free future, but its support for the electric vehicle (EV) battery sector could prove more expensive than it thinks.
According to the Canadian Parliament’s budget officer, financial support for three major EV battery production plants would cost the federal government, as well as the provincial governments in whose vicinity the plants would be built, around US$31.7 billion over a ten-year period. This is 15.6% higher than the previously estimated total cost.
The plants in question are initiatives under global automotive firms Volkswagen and Stellantis, though the latter is collaborating with South Korea’s LG Energy Solution. The third player is Swedish company Northvolt.
Not So Fast
However, some government officials are taking the assessment with a grain of salt.
Francois-Philippe Champagne, the country’s federal innovation minister and a driving force in drawing EV battery plants to boost the Canadian economy, was quick to point out that the assessment did not show how the development of these three plants would affect related supply chains.
In a statement emailed to the press, Champagne remarked how the report did not put emphasis on how over two-thirds of the support offered by the government remains conditional and will be paid out over a ten-year period.
Champagne added that government investments in such initiatives and similar projects would deliver greater benefits to the economy which would far surpass the amounts invested in the first place.
Canada has long been a powerhouse in the global mining industry, but it has expanded its reach in recent years to become a major player in the field of EV battery production. Previously, it has already offered billions of dollars in economic incentives for companies involved in different aspects of EV and EV battery production.
