2023-04-20 19:06:00 ET
Canada's government agreed to subsidies that may reach C$13B (US$9.7B) over a decade in convincing Volkswagen ( OTCPK:VWAGY ) ( OTCPK:VLKAF ) to set up its first electric vehicle battery plant outside of Europe, Bloomberg reported Thursday.
The Trudeau government will provide annual production subsidies as well as a grant toward the factory's capital cost, effectively matching what Volkswagen ( OTCPK:VWAGY ) ( OTCPK:VLKAF ) could have received from the Inflation Reduction Act if it had chosen to locate the plant in the U.S., according to the report .
The disclosure comes a day before Prime Minister Trudeau and Ontario Premier Doug Ford go to St. Thomas, Ontario - once home to a large Ford vehicle assembly plant - to officially reveal details of Volkswagen's ( OTCPK:VWAGY ) ( OTCPK:VLKAF ) new plant.
Trudeau's industry minister, François-Philippe Champagne, told Bloomberg the financial aid for Volkswagen ( OTCPK:VWAGY ) ( OTCPK:VLKAF ) is necessary to protect Canada's position in the North American auto sector and ensure the country is seen as a source of advanced manufacturing and clean technology.
Champagne said the government also is in financial talks for a plant that Stellantis ( STLA ) and LG Energy Solution have said they are planning to build in Ontario.
Volkswagen ( OTCPK:VWAGY ) ( OTCPK:VLKAF ) is targeting more than $190B in EV and tech investments as part of its transition .
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Canada pledges up to C$13B to Volkswagen for Ontario EV battery plant