Break-even Analysis of Production Subsidies for Stellantis-LGES and Volkswagen

Communications

Quote

• We estimate that federal and provincial government tax revenues generated from the Stellantis-LGES and Volkswagen EV battery manufacturing plants over the period 2024 to 2043 will be equal to the total amount of production subsidies. That is, the break-even timeline for the $28.2 billion in production subsidies announced for Stellantis-LGES and Volkswagen is estimated to be twenty years, significantly longer than the Government’s estimate of a payback within five years for Volkswagen.

News Release

{"id":53,"created_at":"2023-09-07T14:30:53-04:00","updated_at":"2023-09-12T08:57:04-04:00","slug":"282-billion-in-ev-battery-production-subsidies-governments-to-break-even-in-20-years-pbo-estimates-subventions-de-282-milliards-de-dollars-a-la-production-de-batteries-pour-vehicules-electriques-les-gouvernements-recupereront-leurs-mises-dans-20-ans-selon-le-dpb","title_en":"$28.2 billion in EV battery production subsidies: Governments to break even in 20 years, PBO estimates","title_fr":"Subventions de 28,2 milliards de dollars \u00e0 la production de batteries pour v\u00e9hicules \u00e9lectriques : Les gouvernements r\u00e9cup\u00e9reront leurs mises dans 20 ans, selon le DPB","body_en":"The Parliamentary Budget Officer (PBO) today released his analysis of the support for Stellantis-LG Energy Solutions and Volkswagen to estimate the period over which government revenues generated from their EV battery manufacturing plants will be equal to the total amount of production subsidies announced by the governments of Canada and Ontario.\n\nIn June, PBO released a report that examined Canada\u2019s support for Volkswagen\u2019s electric vehicle (EV) battery manufacturing plant. Since this publication, the federal government and the government of Ontario announced new production subsidies for the Stellantis-LG Electric Solutions (LGES) EV battery manufacturing plant. Based on the federal government\u2019s estimates, this brings federal and provincial production subsidies for Stellantis-LGES and Volkswagen to $28.2 billion by the end of 2032.\n\nThe federal government also announced a cost-sharing agreement with the government of Ontario under which the federal government will cover two-thirds of the production subsidies for Stellantis-LGES and Volkswagen ($18.8 billion), while Ontario will now cover one-third ($9.4 billion).\n\n\u201cWe estimate that federal and provincial government tax revenues generated from the Stellantis-LGES and Volkswagen EV battery manufacturing plants over the period 2024 to 2043 will be equal to the total amount of production subsidies,\u201d says PBO Yves Giroux. \u201cThat is, the break-even timeline for the $28.2 billion in production subsidies announced for Stellantis-LGES and Volkswagen is estimated to be twenty years, significantly longer than the Government\u2019s estimate of a payback within five years for Volkswagen,\u201d says PBO Yves Giroux.","body_fr":"Le directeur parlementaire du budget (DPB) a publi\u00e9 aujourd\u2019hui son analyse de l\u2019aide financi\u00e8re \u00e0 Stellantis-LG Energy Solutions et Volkswagen afin d\u2019estimer la p\u00e9riode sur laquelle les recettes gouvernementales g\u00e9n\u00e9r\u00e9es par les usines de fabrication de batteries de ces entreprises auront atteint le montant total des subventions \u00e0 la production annonc\u00e9es par les gouvernements du Canada et de l\u2019Ontario.\n\nEn juin, le DPB a publi\u00e9 un rapport examinant le soutien du Canada \u00e0 la construction de l\u2019usine de fabrication de batteries pour v\u00e9hicules \u00e9lectriques de Volkswagen. Depuis la publication du rapport, le gouvernement f\u00e9d\u00e9ral et le gouvernement de l\u2019Ontario ont annonc\u00e9 de nouvelles subventions \u00e0 la production pour l\u2019usine de fabrication de batteries pour v\u00e9hicules \u00e9lectriques de Stellantis LG Electric Solutions (LGES). Selon les estimations du gouvernement f\u00e9d\u00e9ral, cette annonce porte les subventions f\u00e9d\u00e9rales et provinciales \u00e0 la production pour Stellantis-LGES et Volkswagen \u00e0 28,2 milliards de dollars d\u2019ici la fin de l\u2019ann\u00e9e 2032.\n\nLe gouvernement f\u00e9d\u00e9ral a aussi annonc\u00e9 un accord de partage des co\u00fbts avec le gouvernement de l\u2019Ontario en vertu duquel le gouvernement f\u00e9d\u00e9ral assumera les deux tiers des subventions \u00e0 la production pour Stellantis-LGES et Volkswagen (18,8 milliards de dollars), tandis que l\u2019Ontario assumera le tiers (9,4 milliards de dollars).\n\n\u00ab Nous estimons que les recettes fiscales f\u00e9d\u00e9rales et provinciales g\u00e9n\u00e9r\u00e9es par les usines de fabrication de batteries pour v\u00e9hicules \u00e9lectriques de Stellantis-LGES et Volkswagen sur la p\u00e9riode de 2024 \u00e0 2043 seront \u00e9gales au montant total des subventions \u00e0 la production \u00bb, a d\u00e9clar\u00e9 le DPB Yves Giroux. \u00ab C\u2019est \u00e0 dire que le d\u00e9lai pour r\u00e9cup\u00e9rer les 28,2 milliards de dollars en subventions \u00e0 la production annonc\u00e9es pour Stellantis-LGES et Volkswagen est \u00e9valu\u00e9 \u00e0 vingt ans, ce qui est beaucoup plus long que le moins de cinq ans mentionn\u00e9s par le gouvernement pour Volkswagen \u00bb","release_date":"2023-09-12T09:00:00-04:00","is_published":"2023-09-12T08:57:04-04:00","internal_id":"COM-2324-053","permalinks":{"en":{"website":"https:\/\/www.pbo-dpb.ca\/en\/blog\/news-releases--communiques-de-presse\/282-billion-in-ev-battery-production-subsidies-governments-to-break-even-in-20-years-pbo-estimates-subventions-de-282-milliards-de-dollars-a-la-production-de-batteries-pour-vehicules-electriques-les-gouvernements-recupereront-leurs-mises-dans-20-ans-selon-le-dpb"},"fr":{"website":"https:\/\/www.pbo-dpb.ca\/fr\/blog\/news-releases--communiques-de-presse\/282-billion-in-ev-battery-production-subsidies-governments-to-break-even-in-20-years-pbo-estimates-subventions-de-282-milliards-de-dollars-a-la-production-de-batteries-pour-vehicules-electriques-les-gouvernements-recupereront-leurs-mises-dans-20-ans-selon-le-dpb"}},"pivot":{"publication_id":760,"news_release_id":53}}