This photo taken on March 12, 2021 shows a worker with car batteries at a factory for Xinwangda Electric Vehicle Battery Co. Ltd, which makes lithium batteries for electric cars and other uses, in Nanjing in China’s eastern Jiangsu province, China (Photo by STR/AFP via Getty Images)
By Andrew Chen
Less than a year after breaking ground, the company that’s building a major rechargeable battery manufacturing plant in Ontario says it is halting that project due to declining demand for electric vehicles (EVs).
Umicore Rechargeable Battery Materials Canada Inc. is taking “immediate action” to address a “recent significant slowdown in short- and medium-term EV growth projections affecting its activities,” the company said in a July 26 press release. This includes delaying the construction of its battery materials plant in Loyalist Township, about 25 kilometres northwest of Kingston, Ont.
“The large impairment of our Battery Materials assets is painful and reflects the changed situation as we see it today,” Umicore CEO Bart Sap said in the press release.
The decision to halt the project follows a report in June that revealed reduced sales of cathode materials. Umicore cited several factors for this decline, including the earlier-than-expected end of old contracts, delay in the ramp up of new contracts in Europe due to customers scaling back electrification ramp-up plans, and the volume of sales involving a Chinese battery manufacturer not materializing in 2024.
The project, initially estimated to cost up to nearly $2.8 billion, was expected to create over 600 direct jobs plus 700 co-op positions for students, according to an October 2023 news release from the Innovation Department. It received support from both the federal and Ontario governments, with investments of up to roughly $551 million and $425 million respectively.
The Epoch Times reached out to Umicore for comment on how much government funding has been distributed but did not receive an immediate response.
Innovation, Science and Economic Development Canada said in the October 2023 news release that Umicore’s plant could produce enough battery materials to support the production of over 800,000 EVs annually, using Canadian critical minerals like nickel, lithium, and cobalt.
Canada’s shift from gas-powered vehicles to EVs is guided by federal and provincial policies aimed at zero-emission transportation. The federal mandate requires all new light-duty vehicles sold by 2035 to be zero-emission, with interim targets of 20 percent by 2026 and 60 percent by 2030. Some provincial policies, such as those in Quebec, are even stricter, including a planned ban on all gas-powered vehicles and used gas engines by 2035.
This transition has raised concerns, including how battery waste is managed and the potential use of child labour in the supply chain. The United Nations Children’s Fund has reported on child labour associated with mining materials for EV batteries, such as cobalt from the Democratic Republic of the Congo.
Additionally, there are concerns about market oversupply due to overproduction in China.
Ottawa launched a 30-day consultation starting July 2 to explore the possibility of imposing tariffs on Chinese EV imports, saying that Canada currently faces unfair competition and unfair trade practices from China.
The move aims to protect Canada’s autoworkers and EV industry from China’s “intentional, state-directed policy of overcapacity and lack of rigorous labour and environmental standards,” Finance Minister Chrystia Freeland said in a June 24 news release announcing the consultation.