Umicore Rechargeable Battery Materials Canada Inc. has announced that it is halting the construction of a major rechargeable battery manufacturing plant in Ontario due to declining demand for electric vehicles (EVs). The company cited a recent significant slowdown in short- and medium-term EV growth projections as the reason for this decision.
Umicore CEO Bart Sap expressed the company’s disappointment, stating, “The large impairment of our Battery Materials assets is painful and reflects the changed situation as we see it today.”
The decision to delay the project comes after a report in June revealed reduced sales of cathode materials. Factors contributing to this decline include the early termination of old contracts, delays in the ramp-up of new contracts in Europe, and unmaterialized sales involving a Chinese battery manufacturer.
The project, initially estimated to cost nearly $2.8 billion, was expected to create over 600 direct jobs and 700 co-op positions for students. Both the federal and Ontario governments had invested approximately $551 million and $425 million, respectively, in the project.
The Epoch Times reached out to Umicore for information on the distribution of government funding but did not receive an immediate response.
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Innovation, Science and Economic Development Canada stated that Umicore’s plant had the capacity to produce enough battery materials to support the production of over 800,000 EVs annually, utilizing Canadian critical minerals such as nickel, lithium, and cobalt.
Canada’s transition from gas-powered vehicles to EVs is driven by federal and provincial policies focused on zero-emission transportation. The federal mandate requires all new light-duty vehicles sold by 2035 to be zero-emission, with interim targets set at 20 percent by 2026 and 60 percent by 2030.
Concerns have been raised about battery waste management, potential child labor in the supply chain, and market oversupply due to overproduction in China. Ottawa initiated a 30-day consultation to explore the imposition of tariffs on Chinese EV imports to protect Canada’s autoworkers and EV industry from unfair competition.
The move is aimed at addressing China’s policy of overcapacity and lack of labor and environmental standards, as stated by Finance Minister Chrystia Freeland.
Tara MacIsaac contributed to this report.
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