Ontario has entered into an auto pact agreement with the federal government. In addition to paying one-third of the production incentives for Stellantis and LG Energy Solution, Ontario has also agreed to provide incentives for a Volkswagen battery plant. This comes after Stellantis and LG suspended construction on a $5-billion electric vehicle battery facility in Windsor, Ontario, in May, seeking a matching offer from the federal government similar to the United States’ Inflation Reduction Act.
Under the new agreement, Stellantis will receive up to $15 billion in performance incentives over a span of about 10 years. Deputy Prime Minister Chrystia Freeland emphasized the importance of these incentives for both Volkswagen and Stellantis in establishing Canada’s green economy and preventing the companies from being enticed to the United States by the benefits offered under the IRA.
The cost-sharing agreement extends not only to Stellantis, but also to the production incentives for a Volkswagen electric vehicle battery facility in St. Thomas, Ontario. The Ontario government agreed to cover one-third of the production incentives and has committed $500 million in capital. These incentives, in the form of tax breaks, are tied to the company’s output and will only be available if they manufacture batteries in Ontario.
The Ontario government is keen to attract more battery manufacturers and component makers, highlighting the province’s resources, supply chain, and recycling capabilities. The agreement with Stellantis also includes commitments to maintain production mandates at its plant in Brampton and to increase investments in Canada and Ontario, including the establishment of a research and development facility in Windsor.
It’s worth noting that the performance incentives in these agreements are contingent upon the production and sale of batteries. If the IRA in the United States is canceled or the incentives are reduced, the Canadian agreements will follow suit.
In conclusion, Ontario’s auto pact agreements aim to promote the growth of the electric vehicle industry in the province and secure investments from major automakers. These agreements provide incentives for the construction of battery plants and ensure that Ontario remains an attractive destination for automotive manufacturers.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
