Ontario’s vision for an end-to-end electric vehicle supply chain, once an aggressive focus for Premier Doug Ford, has been sputtering as manufacturers delay or cancel plans, and the government is now looking to demands for batteries of a different sort to sustain it.
Ford and the federal government negotiated to bring three electric vehicle battery plants to Ontario — investments worth billions of dollars — and had hoped to not only see those batteries go into EVs made in the province but also to have them made with parts produced in Ontario and with minerals mined and refined in the province.
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A few years after laying out the idea, though, its initial promise has waned.
Honda, which was set to build an EV battery plant and assemble electric vehicles in Alliston, delayed the project due to dwindling demand.
Umicore put its plans for a cathode plant in eastern Ontario on hold.
General Motors ended production of its BrightDrop electric delivery van in Ingersoll. Ford delayed plans to build electric vehicles in Oakville in favour of its F-Series gas-powered pickup trucks.
The auto industry in Ontario is further threatened, the premier believes, by a new deal between Canada and China that will see 100 per cent tariffs on Chinese EVs all but removed in exchange for China dropping tariffs on canola.
However, some experts say giving Canadians access to less expensive Chinese EVs could help stimulate general demand for the green vehicles and therefore boost the domestic industry in the long term.
Globally, demand is rising for electric vehicles but in Canada, uncertainty over rebates is dampening demand and uncertainty over federal EV sales mandates as well as Canada-U.S. trade is weakening investor confidence, experts say.
Stellantis, meanwhile, is approaching the slump differently. Construction and some production was already well underway at its NextStar Energy facility in Windsor, a joint venture with LG, when trends began to shift. While the company has also decided to delay production of EV batteries, it did some retooling to make batteries for energy storage.
Demand for electric vehicles will return, NextStar CEO Danies Lee said in an interview, but right now there is demand for batteries for storage and other uses like AI-powered machines.
“As an EV battery manufacturer, we faced a huge setback due to the market conditions, but as a battery manufacturer that deals with all the different applications it’s a great opportunity,” Lee said.
Economic Development Minister Vic Fedeli said it allows the plan for an end-to-end EV supply chain to continue, albeit with a somewhat different last step at least for now.
“(Stellantis’ pivot) is with our full understanding, our blessing, and in fact, our encouragement,” he said in an interview last month.
Those storage batteries need the same minerals that will be mined and ideally refined in Ontario, Fedeli said, and parts such as separators that will be produced in Ontario. Asahi Kasei’s planned separator facility in the Niagara Region is going ahead despite being initially announced in conjunction with Honda’s EV plans.
The government has no interest in interventions to help stimulate the market for electric vehicles and their batteries, Fedeli suggested, saying Ontario just wants companies to build here.
The actual product is less important.
“These are multi-billion dollar, multinational companies who’ve made choices on what to build, and the market has to be there for them,” he said.
“If they want to build something, we’ll help them build it. If they create jobs, we’re agnostic to what they build. We just want the jobs. So when Ford (Motor Co.) came to us and said, ‘We want to change the EV line to the F-150,’ the answer took about five seconds.”
It is a stark change in tone from just a year and a half ago when Fedeli was bullish, heady even, with the prospects for Ontario’s EV supply chain.
“The electric vehicle sales are up every single year, year over year, and we’re absolutely confident that we’ve made all the right moves and we’ve made Ontario the No. 1-in-the-world choice for the electric vehicle supply chain,” he said in July 2024.
Joanna Kyriazis, director of policy and strategy for a clean energy think tank at Simon Fraser University, said the demand for electric vehicles in North America will return in line with worldwide sales trends.
“Globally, EV sales continue to break records, and they did all throughout 2025,” she said.
“EV sales were up 20 per cent around the world. Places like China were seeing over 50 per cent new car sales being electric. In the EU it was around 30 per cent … A number of less developed countries, whether it’s Brazil, Thailand, Nepal, they’re all seeing a huge spike in electric vehicle sales too, and this is largely driven by access to low-cost Chinese electric vehicles.”
Sam Fiorani, vice-president of global vehicle forecasting at AutoForecast Solutions, said eventually the capacity will be needed to build electric vehicles, it is just unlikely to happen in the next five years.
“So much investment has been made in battery production, and the demand for EVs has not ramped up as quickly as … the manufacturers expected,” he said.
“They’re going to need another outlet for this product to pay off some of the investment, and battery and stationary storage is a good idea in the short term.”
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Even at Volkswagen, whose PowerCo facility under construction in St. Thomas is the one EV battery plant that is forging ahead with plans to produce vehicle batteries, storage batteries are a consideration.
“In its initial stage, the St. Thomas gigafactory is intended to supply battery cells for the automotive market,” the company wrote in a statement. “At the same time, PowerCo globally is developing a unified battery cell technology that can support multiple applications, including stationary energy storage.”
The company noted that its charging and energy subsidiary, Elli, has announced the first large-scale stationary storage system in Salzgitter, Germany based on PowerCo battery packs.
“That project demonstrates how PowerCo’s standardized cell platform is designed to serve both e-mobility and energy system applications as market needs evolve,” it wrote.
The demands for battery storage will be great and last beyond the next few years of a struggling EV market, said John Stackhouse, senior vice-president in the office of the CEO at the Royal Bank of Canada.
“We can diversify our auto manufacturing base,” he said. “Battery storage is a big opportunity, and I wouldn’t call it an interim opportunity. It’s a strategic opportunity, because there will be more demand for battery storage technologies and capabilities.”
In Ontario alone, the electricity system operator has forecasted that electricity demand will grow 75 per cent by 2050, in part due to the EV sector manufacturing as well as new data centres supporting artificial intelligence.
Battery storage technology helps provide both a reliable supply of electricity and a predictable price, which is important for a lot of businesses, Stackhouse said.
“There could be a double win there for Ontario, both through battery storage and the eventual growth of EVs.”
