Canada bet billions on an EV boom.
asserted
Canada → bet → boom
The federal and provincial governments bet billions on the rapid rise of the electric vehicle industry.
asserted
governments → bet → industry
But major EV and battery projects in Ontario, Quebec and British Columbia have since been delayed, cancelled, suspended, substantially changed — and in one case, gone bankrupt — as automakers and suppliers adjust to weaker-than-anticipated demand.
asserted
automakers → delay → demand
The latest is Volkswagen's massive PowerCo battery plant in St. Thomas, Ont., where production has been pushed back two years to 2029, because of "evolving market demand."
asserted
production → push → demand
The setbacks are raising questions about whether Canada bet too big on how quickly the EV market would grow.
asserted
market → raise → questions
Critics say demand may never reach the levels needed to support the scale of battery production governments sought to attract, while others argue these are temporary delays in the decades-long shift toward electrification.
uncertain
these → say → electrification
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.
asserted
plant → study → strategy
When the project was announced in 2023, PowerCo said the plant would eventually make enough battery cells for roughly one million EVs a year.
asserted
plant → announce → EVs
Mordue says that 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're intended to power.
asserted
they → say → vehicles
Europe isn't the obvious destination either, he says, because Volkswagen (VW) already has battery production capacity there.
asserted
Volkswagen → say → capacity
Even together, VW's North American plants don't produce enough vehicles to provide an obvious market for a million batteries a year.
asserted
plants → produce → batteries
"They got a million batteries," he said.
asserted
he → got → batteries
"What are they going to do with them?"
asserted
they → go → them
VW and its PowerCo subsidiary did not respond to a request for comment.
asserted
VW → respond → comment
VW has said the plant remains a cornerstone of its North American battery strategy and is continuing construction even as it pushes production back.
asserted
it → say → production
VW also said the delay will allow it to incorporate newer battery technology and scale production as demand develops.
asserted
demand → say → production
It could also have an upside for taxpayers, Mordue said — in the form of a smaller subsidy bill.
uncertain
Mordue → have → bill
Much of the support promised to Volkswagen is still tied to how many batteries the plant produces.
asserted
plant → promise → batteries
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.
asserted
governments → set → maximum
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 governments have agreed to in production subsidies.
"The government remains engaged with PowerCo on their updated timelines," the statement said.
asserted
statement → say → timelines
Ontario's Ministry of Economic Development Job Creation and Trade did not respond by deadline.
asserted
Ministry → respond → deadline
A bet on the long-term
Still, others argue that looking at today's EV demand misses the time scale on which investments such as St. Thomas were made.
asserted
investments → argue → Thomas
"These investments are meant to last 50 to 70 years or more," Joanna Kyriazis, directory of policy and strategy at Clean Energy Canada told CBC News.
asserted
Kyriazis → mean → News
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.
asserted
Canada → say → capacity
There are signs Canada's EV market may already be recovering after a slowdown.
uncertain
market → be → slowdown
New restgistrations of battery-only EVs rose 37.4 per cent in the second quarter of 2026, compared with the same time last year, according to Statistics Canada.
uncertain
restgistrations → rise → Canada
When hybrids are included, Canadians registered 58,811 new zero-emission vehicles during the quarter, up 26.7 per cent.
asserted
Canadians → include → quarter
Kyriazis says the investments are about keeping Canada relevant as the global auto industry undergoes a historic shift from gasoline-powered vehicles.
asserted
industry → say → vehicles
"It's not a question of maintaining a place in the North American auto indstury.
asserted
It → maintain → indstury
It's — is Canada going to have an auto industry that survives in the 21st century at all?" she said.
asserted
she → go → century
"There's a clear direction that the global auto sector is going and if Canada wants to have a competitve auto sector into the future, we've got to be able to make and sell competitively priced electric vehicles and the parts that go into them.
asserted
that → be → them
Kyriazis says the potential market for these batteries also extends beyond electric vehicles.
asserted
market → say → vehicles
As electricity grids expand, batteries will increasingly be needed to store power and help balance supply and demand.
asserted
batteries → expand → supply
Gas prices and new incentives sparking more EV sales
asserted
prices → spark → sales
Gas prices are dropping.
asserted
prices → drop → ?
You can thank the 'winter blend' for that
The St. Thomas site and a NextStar plant in Windsor, she said, "were looking at a short-term strategy of building batteries that would be used for grid-scale storage while EV update in North American started to sort of even out."
asserted
update → thank → American
Kyriazis argues the current U.S. retreat from electric vehicles could prove temporary and that Canada shouldn't base a decades-long industrial strategy on policies that could change again under a future administration.
uncertain
that → argue → administration
There is evidence the EV battery bet may have been early rather than fundamentally misplaced.
uncertain
bet → be → ?
The wider justification for building domestic battery capacity hasn't disappeared either.
asserted
justification → build → capacity
China produced more than 80 per cent of the world's battery cells last year, according to the International Energy Agency, leaving governments in North America and Europe to build domestic supply chains in an industry that remains heavily concentrated in Asia.
uncertain
that → produce → Asia
…and 15 more, not listed.
The Aporia
