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Canada revs up its EV batteries manufacturing

MONTREAL (AFP) – As the world accelerates toward emissions-free driving, Canada is making a big push into batteries for electric vehicles (EVs) – touting tax incentives, bountiful critical minerals and clean energy to attract multinationals.

Its efforts appear to be paying off with companies such as Volkswagen and Stellantis opening plants and more than CAD18 billion (USD13 billion) in investment attracted to the sector, which is emerging as second only to top battery manufacturer China.

This week Ottawa doubled down with the introduction of a 30-per-cent tax credit for new machinery and equipment used to manufacture clean technologies, and to mine or recycle cobalt, lithium, nickel and other critical minerals used in EV batteries.

“This is not just a new chapter. It’s almost a new book we’re writing on the automotive sector in Canada,” Industry Minister Francois-Philippe Champagne said after announcing in early March that Volkswagen’s first North American battery factory would be built in St Thomas, Ontario.

The Germany-based auto giant is also the first new manufacturer to set up shop in Canada in 35 years. Multinational automaker Stellantis and LG Energy Solution have also partnered on a new battery plant in Canada, while French tire manufacturer Michelin is expanding its local facility.

And General Motors has signed a longterm agreement with Brazilian mining giant Vale for supplies of Canadian nickel for use in EV batteries.

“Canada has gone from fifth to second in the world in terms of our battery supply chain,” Canadian Prime Minister Justin Trudeau boasted, referring to the latest ranking by research firm BloombergNEF, which placed the country just behind China.

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