According to the country’s budgetary watchdog, the Canadian government will recover its investment in the two electric vehicle (EV) battery plants being built by Volkswagen and Stellantis-LG Electric Solutions in approximately 20 years. This estimation was announced on Tuesday by Parliamentary Budget Officer Yves Giroux, who also stated that the federal and provincial government tax revenues generated from these plants between 2024 and 2043 will equal the total amount of production subsidies provided.
“The analysis released today by the Parliamentary Budget Officer demonstrates that the investments made by Stellantis-LGES and Volkswagen are highly beneficial for Canadians, the auto sector, and our workers,” said Canada’s industry minister Francois-Philippe Champagne in a statement.
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This bird’s-eye view shows the site where Volkswagen Group’s battery company PowerCo SE will construct the gigafactory for electric vehicle battery production in St. Thomas, Ontario, Canada, on April 21, 2023. (REUTERS/Carlos Osorio/File Photo)
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The Canadian federal government, along with Ontario, offered up to $11.3 billion in performance incentives for Stellantis-LG Energy Solution and $13 billion in manufacturing tax credits, along with a $700 million grant, to attract the German automaker. Canada, known for its abundant mining sector for minerals such as lithium, nickel, and cobalt, is actively seeking to attract companies engaged in all aspects of the EV supply chain as the world focuses on reducing carbon emissions.
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