Volkswagen’s first North American electric vehicle battery plant is set to be built in Canada, with Prime Minister Justin Trudeau and other Canadian politicians revealing Friday that the country was effectively in a bidding war with the United States. made it
“We put a lot of money into it,” Mr. Trudeau said at a news conference in St. Thomas, Ontario. “Everybody wanted this”
Volkswagen announced last month that it would set up its first battery factory outside of Europe in Canada, but gave few details. On Friday, Canada and the province of Ontario announced that he would give the company C$1 billion (about $750 million in US dollars) to build the plant.
Another deal provides C$8 billion to C$10 billion in subsidies over the next 10 years, comparable to the benefits Volkswagen would have made under the Inflation Reduction Act had it had factories in the United States. To do. That amount is tied to battery production.
Trudeau spoke in front of a steam locomotive and two electric Volkswagen models at a railroad museum, explaining that while Canada’s inability to roughly match US industrial subsidies, the deal with Volkswagen stemmed from Canadian policy decisions. Strategically challenge your neighbors.
Volkswagen is considering about 10 other plants in North America, which it hopes will eventually employ 3,000 people and produce enough batteries for one million cars a year. says.
said Frank Blome, CEO of PowerCo, Volkswagen’s battery subsidiary.
The Volkswagen plant will be Ontario’s second largest battery operation. Last year, automaker Stellantis and his South Korean company LG Energy Solutions unveiled Stellantis’ Windsor plant with a large Chrysler-built assembly plant. The plant, which employs 2,500 people and will start production next year, has also received a significant government subsidy for a cost of C$5 billion.
Volkswagen became the sixth automaker to have major operations in Canada’s most populous province, Ontario, and the first to do so since Honda and Toyota entered the province in the 1980s. car manufacturer. St. Thomas was once home to a heavy truck factory owned by Germany’s Daimler and a factory for Ford Motor Company. Ford Motor’s factories in the last few years assembled cars that were primarily used as police cruisers and taxis. Both he closed by 2011, never to be replaced by other industries.
After the initial announcement last month, opposition Canadian Conservative Party leader Pierre Polivre accused the government of subsidizing Volkswagen.
“This money belongs to Canadians.” he wrote on twitter. “It’s not foreign-owned. It’s not Justin Trudeau.”
But Andreas Schotter, associate professor of international business at Western University in London, Ontario, and former finance director for Volkswagen North America, said the subsidies are a reality for countries looking to sustain their auto industries. said.
“It’s good, but it comes with a high degree of risk,” he said, noting that policy changes, especially in the United States, could slow the transition to electric vehicles, or that other technologies such as hydrogen fuel cells may become more time-consuming. I pointed out that the battery may be removed over time.
Halfway between Detroit and Toronto, St. Thomas is at the heart of Canada’s automotive corridor, yet far from Volkswagen’s North American plants in Tennessee and Mexico. But it’s just steps away from a plant where General Motors recently started making electric delivery vans, and a Toyota plant that makes hybrid crossovers.
Over time, the new factory may supply batteries to other companies, Dr. Schotter said.
