Canada brings new EV tax credit to lure automakers

Canada plans to bring more electric vehicle (EV) investment into the country with a new EV investment tax credit in the 2023-24 budget.

Presented by Finance Minister Chrystia Freeland, the budget has a 10 percent electric vehicle supply chain investment tax credit on the cost of buildings used in electric vehicle assembly, electric vehicle battery production, and cathode active material production.

The latest tax credit announcement comes amid two of the major automakers Honda and Toyota considering multi-billion automotive manufacturing facilities in Canada.

The budget detail reveals that tax credits are supposed to encourage companies to choose Canada for more than one stage in the manufacturing process. It also indicates the Canadian government’s strategy to put more investment on board and bring manufacturing into the country.

However, Honda has high ambitions from the Canadian side but the company is not getting another production subsidy based on the revelation made by the media. Instead, the government has put these new incentives as the last milestone for EV makers.

A report from January suggests that Honda has considered about 2 trillion yen ($14 billion) investment in Canada for an EV production side. However, the company has not announced this plan in action.

AI:

The budget also announced 2.4 billion Canadian dollars to improve the development of artificial intelligence technologies. This includes 2 billion CAD to enable computing capabilities and to build infrastructure for researchers, start-ups, and scale-ups.

(source)