From Top Electric.

Volkswagen and Stellantis are redirecting billions in investments from the U.S. to Canada, driven by rising U.S. tariffs on steel (from 25% to 50%) and regulatory uncertainties. Volkswagen has shelved California production plans, opting for a $4.5 billion gigafactory in St. Thomas, Ontario, leveraging German cell technology and Quebec’s lithium and nickel reserves to produce advanced EV batteries. The Canadian government’s 15% investment credit, green energy incentives, and absence of mandatory union negotiations offer significant cost savings compared to the U.S., where tariffs and labor disputes increase risks. Stellantis, with historical ties to Detroit via Chrysler, is investing 4 billion CAD in a Windsor battery facility with LG Energy Solution. This move is motivated by U.S. tariff risks and “Made in America” rules complicating supply chains, while Ontario’s critical mineral waiver and stable labor environment enhance efficiency. Both companies benefit from trade loopholes allowing duty-free battery exports to the U.S., positioning Canada as a strategic EV hub. These shifts reflect broader trends, with Canada’s stable tax rates and fast-track visas for skilled workers outshining U.S. protectionism. However, Canada’s infrastructure faces challenges in handling this industrial influx. The decisions by Volkswagen and Stellantis signal a potential reconfiguration of North American manufacturing, with Canada emerging as a key player in the EV market.

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