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View shows the site where the gigafactory for electric vehicle battery production by Volkswagen Group’s battery company PowerCo SE will be built in St. Thomas, Ontario, Canada April 21, 2023. REUTERS/Carlos Osorio/File Photo Acquire Licensing Rights
Sept 12 (Reuters) – The Canadian government will recoup its investment in about 20 years for the two electric vehicle (EV) battery plants that Volkswagen and Stellantis-LG Electric Solutions (STLAM.MI), are building, the country’s budgetary watchdog said on Tuesday.
“We estimate that federal and provincial government tax revenues generated from the Stellantis-LGES and Volkswagen EV battery manufacturing plants over the period 2024 to 2043 will be equal to the total amount of production subsidies,” Parliamentary Budget Officer Yves Giroux said.
“The Parliamentary Budget Officer’s analysis released today demonstrates that the Stellantis-LGES and Volkswagen investments are good deals for Canadians, the auto sector and our workers,” Canada’s industry minister Francois-Philippe Champagne said in statement.
Canada’s federal government and Ontario together provided up to C$15 billion ($11.3 billion) in performance incentives for a Stellantis-LG Energy Solution and C$13 billion in manufacturing tax credits and a C$700 million grant to lure the German automaker.
Canada, home to a large mining sector for minerals including lithium, nickel and cobalt, is trying to woo companies involved in all levels of the EV supply chain as the world seeks to cut carbon emissions.
($1 = 1.3557 Canadian dollars)
Reporting by Urvi Dugar in Bengaluru; Editing by Josie Kao
Our Standards: The Thomson Reuters Trust Principles.
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