+34
Major EV battery projects in Ontario, Quebec and British Columbia have been delayed, cancelled or gone bankrupt as demand grows slower than expected, raising questions about Canada's bet.
Major electric vehicle and battery projects across Ontario, Quebec and British Columbia have been delayed, cancelled, suspended or substantially changed, and in one case gone bankrupt, as automakers and suppliers adjust to weaker-than-anticipated demand. The federal and provincial governments had committed billions of dollars to attract EV and battery manufacturing, but the setbacks are raising questions about whether Canada bet too big on how quickly the EV market would grow.
PowerCo Plant Delay in St. Thomas
In St. Thomas, Ontario, the steel frame of PowerCo's battery plant rises from the construction site. Volkswagen's battery subsidiary now says production at the plant will begin in 2029, two years later than originally planned. When the project was announced in 2023, PowerCo said the plant would eventually make enough battery cells for roughly one million EVs a year.
Grieg Mordue, a former Toyota executive and retired McMaster University professor who studied the auto industry, says the St. Thomas plant illustrates two problems with Canada's EV investment strategy: scale and location. He says the plant's scale seemed inefficient since Volkswagen's major assembly operations are in the southern United States and Mexico, meaning batteries produced in St. Thomas would have to travel long distances to reach the vehicles they are intended to power.
Mordue adds that Europe is not the obvious destination either, because Volkswagen already has battery production capacity there. Even together, VW's North American plants do not produce enough vehicles to provide an obvious market for a million batteries a year. VW and its PowerCo subsidiary did not respond to a request for comment. VW also said the delay will allow it to incorporate newer battery technology and scale production as demand develops.
Production Subsidies Tied to Output
The federal and provincial governments have agreed to $13.2 billion in production subsidies. Innovation, Science and Economic Development Canada said in a statement that the federal government has so far contributed $700 million to the construction of the St. Thomas battery plant, noting Ontario is responsible for one third of the $13.2 billion in production subsidies.
The subsidies are tied to how many batteries the plant produces. With production now set for 2029 and with those incentives scheduled to start declining in 2030 and ending in 2032, Mordue says governments will likely pay a whole lot less than the original maximum.
Long-Term View on EV Investments
Others argue that looking at today's EV demand misses the time scale on which investments such as St. Thomas were made. Joanna Kyriazis, director of policy and strategy at Clean Energy Canada, told CBC News that these investments are meant to last 50 to 70 years or more. She said the current slowdown should be seen as growing pains in an industry that is still transitioning, rather than evidence Canada built too much battery capacity.
Kyriazis says the investments are about keeping Canada relevant as the global auto industry undergoes a historic shift from gasoline-powered vehicles. She said it is not a question of maintaining a place in the North American auto industry, but whether Canada is going to have an auto industry that survives in the 21st century at all. There is a clear direction that the global auto sector is going and if Canada wants to have a competitive auto sector into the future, we have got to be able to make and sell competitively priced electric vehicles and the parts that go into them.
Kyriazis says the potential market for these batteries also extends beyond electric vehicles. New registrations of battery-only EVs rose 37.4 per cent in the second quarter of 2026, compared with the same time last year. Despite government subsidies for producers and consumers, electric vehicles accounted for 11.7 per cent of new light-duty vehicle sales in Canada in the first three months of 2026.
In Ingersoll, Ontario, General Motors' CAMI Assembly plant was converted into Canada's first full-scale EV plant in 2022, but production was suspended in 2025. The audio version of this article is generated by AI-based technology. Mispronunciations can occur. We are working with our partners to continually review and improve the results.
Canada EV Battery Projects Powerco St. Thomas Volkswagen Electric Vehicle Demand Government Subsidies Ontario Clean Energy Canada
Canada Latest News, Canada Headlines
Similar News: You can also read news stories similar to this one that we have collected from other news sources.
Rick Ross Arrested in Miami Beach on Battery by Strangulation and Misdemeanor Battery ChargesRapper Rick Ross was arrested early Thursday in Miami Beach on a felony battery by strangulation charge and a misdemeanor battery charge tied to a domestic violence accusation. His attorney says Ross is innocent and has pleaded not guilty.
Read more »
Rick Ross arrested in Miami Beach, charged with battery by strangulation in domestic violence caseRapper Rick Ross was arrested in Miami Beach on Thursday and charged with felony battery by strangulation and misdemeanor battery in an alleged domestic violence incident. Ross denies the accusations, calling them fabricated allegations, and has pled not guilty.
Read more »
Michael J. Fox Gets Order of Canada Companion, Says Canada-US Ties Doomed to SuccessMichael J. Fox was elevated to the companion level of the Order of Canada at Rideau Hall and told CTV News the Canada-US relationship is doomed to success despite the trade war.
Read more »
Lithium-Ion Battery Fires Rise in Canada as Lethbridge Urges Safe Charging and RecyclingLethbridge Fire and Emergency Services warns of rising lithium-ion battery fires in Canada ahead of Fire Prevention Week, urging safe charging, storage and recycling.
Read more »