Canada bet billions on an EV boom. Was it too much, too soon?
Volkswagen has delayed the production start of its massive battery plant in Ontario, Canada, to 2029 due to shifting market demand for electric vehicles. Critics are questioning the scale of government investment in EV infrastructure given the slower-than-expected adoption rates.
Why it matters
This delay raises questions about the viability of aggressive government subsidies for EV manufacturing in the face of cooling consumer 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."
The setbacks are raising questions about whether Canada bet too big on how quickly the EV market would grow. 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.
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.
When the project was announced in 2023, PowerCo said the plant would eventually make enough battery cells for roughly one million EVs a year.
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