Canada Lands Volkswagen Battery Plant With Billions in Subsidies

Prime Minister Justin Trudeau said the assistance was needed to offset incentives offered by the United States.

Volkswagen’s first North American battery plant for electric vehicles will be built in Canada, and Prime Minister Justin Trudeau and other Canadian politicians made it clear on Friday that the country had effectively been in a bidding war with the United States.

“We put up a lot of money,” Mr. Trudeau said at a news conference in St. Thomas, Ontario, where six assembly lines covering 370 acres will be built. “Everyone wanted this.”

Volkswagen announced last month that it would put its first battery plant outside Europe in Canada, but provided few details. On Friday, Canada and the province of Ontario said they would give the company a combined 1 billion Canadian dollars — about $750 million in U.S. currency — to construct the factory, which will cost 7 billion Canadian dollars overall.

A separate agreement will provide 8 billion to 10 billion Canadian dollars in subsidies over the next decade to match benefits that Volkswagen would have received under the Inflation Reduction Act if it had put the factory in the United States. That amount is tied to battery production.

Mr. Trudeau, speaking at a railway museum in front of a steam locomotive and two electric Volkswagen models, said that while it was impossible for Canada to broadly match U.S. industrial subsidies, the deal with Volkswagen had come out of a policy decision by Canada to strategically challenge its neighbor.

Learn more: The New York Times