How the $15-billion Honda deal stacks up against other major EV investments
Government subsidies secure agreements
The federal and Ontario governments announced a deal with Honda Motor Co. Ltd. Thursday that will see the Japanese automaker establish an electric vehicle supply chain and assembly plant in the province. The $15-billion project, billed by Prime Minister Justin Trudeau as the largest automotive investment in Canadian history, is the latest in a string of major investments, facilitated by government, aimed at making Canada a player in the global EV supply chain. The Financial Post’s Denise Paglinawan rounds up the biggest investments so far, now totalling more than $46 billion since 2020, and how governments have chipped in.
STELLANTIS NV AND LG ENERGY SOLUTION
In March 2022, Stellantis NV and LG Energy Solution announced plans to invest more than $5 billion to build a lithium-ion battery plant in Windsor, Ont., after reaching a “binding” financing deal with the governments of Canada and Ontario. After construction was briefly halted in a dispute over subsidies, the governments of Canada and Ontario confirmed in July last year that they would provide the project with performance incentives worth up to $15 billion, with Ontario covering onethird of the cost, provided the companies meet certain conditions. The federal government subsidy will come in the form of performance incentives, based on the number of kilowatt-hours produced.
VOLKSWAGEN AG
In a deal first announced in March 2023, the federal and Ontario governments said the German automaker, through its subsidiary Powerco, will build its first overseas battery manufacturing plant, valued at $7 billion, in St. Thomas, Ont. Volkswagen says the gigafactory will have enough capacity to build batteries for up to one million EV’S per year. Similar to the Stellantis deal, Volkswagen could receive significant performance incentives, totally at least $13 billion. An additional $2.8 billion in federal tax adjustments could bring the overall cost to Ottawa to $16.3 billion, according to the parliamentary budget officer.
NORTHVOLT AB
Swedish manufacturer Northvolt AB plans to open its first North American electric vehicle battery plant near Montreal by 2026, with the help of generous subsidies similar to commitments for Volkswagen AG and Stellantis NV factories in Ontario.
The project is valued at a total of $7 billion. In September, Canada pledged to contribute up to $1.34 billion to support Northvolt during construction and battery production, while Quebec’s government will provide up to $2.9 billion in capital commitment to secure the deal. The governments also committed to match subsidies available for U.S. manufacturing under the Inflation Reduction Act, equalling up to US$35 per kwh produced.
FORD MOTOR COMPANY
Ford Motor Company, together with South Korea’s Ecoprobm and SK On, announced in August that it will build a cathode manufacturing facility in Bécancour, Que. to supply battery materials for Ford’s future electric vehicles.
The project is valued at more than $1.2 billion. The new facility is Ford’s first investment in Quebec and part of the automaker’s plan to localize key battery raw material processing in regions where it produces EVS. Production is set to begin in the first half of 2026. The federal and Quebec governments announced funding of $644 million for the construction of the new battery materials production plant, with Ottawa contributing a conditional $322 million through the Strategic Innovation Fund, and Quebec providing a partially forgivable loan of $322 million through Investissement Quebec. The company is also investing $1.8 billion to repurpose its assembly complex in Oakville, Ont., but announced earlier this month that the plant would not begin assembling EVS there until 2027, two years later than initially planned.