Canadian Prime Minister Justin Trudeau has announced a massive deal with German automaker Volkswagen Group to implement its first electric vehicle plant outside of Europe in the country. Canada has promised the group billions in matched subsidies offered by the US government to construct its massive new battery gigafactory north.
While it was still under the tutelage of ousted CEO Herbert Diess, Volkswagen Group publicly outlined plans for six new battery gigafactories throughout Europe this decade, including a site in Skellefteå, Sweden, through a joint venture with NorthVolt scheduled to open this year.
This past February, VW Group announced that its Seat sub-brand would be revamping its production facilities in Spain to include a new battery facility for other group EVs as well. With three battery plants under construction and four more planned, Volkswagen Group suddenly paused development to await the EU’s response to the US Inflation Reduction Act.
Volkswagen Group then turned its battery production focus to North America. This past December, new CEO Oliver Blume called Canada “one logical option.” By March, however, the US appeared to be the clear target for the Group as it shared it was anticipating claiming between $9.5-$10.5 billion in subsidies and loans from the Inflation Reduction Act (IRA) over the lifetime of its pending battery plant.
As a free trade partner with the US looking to stay relevant in a booming EV production landscape, Canada said, “Sorry, not so fast.” Canada’s industry minister was able to negotiate a deal with Volkswagen that matches those US subsidies in exchange for building the battery factory a bit further north.
Volkswagen Group’s previous plans for battery plants in Europe, which will now be focused on Canada. / Credit: Volkswagen Group
Volkswagen battery deal helps Canada keep pace with IRA
In order to lure Volkswagen Group to Canada, the government has agreed to subsidies that could top CAD 13 billion ($9.7 billion) over the course of the next decade that the battery plant is in operation. When complete, the new facility will be operated under Volkswagen Group’s PowerCo business unit and could very well become the largest manufacturing site in the entire country.
Prime Minister Trudeau’s industry minister François-Philippe Champagne negotiated the landmark contract, which will not only provide annual production subsidies to Volkswagen but also includes a CAD 700 million ($517M) grant toward the battery factory’s capital cost.
According to government officials, these negotiated terms match what VW would have received in subsidies from the US government should it have chosen the states as its new home. What’s more clever is that the negotiated deal is proportional to the Inflation Reduction Act. If the US subsidies go away, so do Volkswagen’s in Canada. If they are reduced, Canada’s will too.
Despite losing the bid, the US is still home to ID.4 production at its Chattanooga, Tennessee, plant, which will soon be joined by a new production facility to build upcoming Scout brand EVs in South Carolina.
As a North American country and free trade partner with the US, battery packs assembled in Canada should still enable some level of federal tax credits on future Volkswagen EVs in the US under new terms outlined in the Inflation Reduction Act, including fresh battery guidance detailed by the US Department of Treasury earlier this month.
While not everyone in Canada is elated by the eleven-figure financial commitment to Volkswagen, the industry minister argues the economic value the automaker brings to the country and its supply chain is worth far more than the subsidies. Champagne and his colleagues believe that to protect Canada’s position in automotive production, especially as it goes all-electric, the country must transcend the role as a mere source of critical minerals and become a genuine contributor to advanced EV manufacturing and zero emissions technology.
Being about two hours northeast of an automotive mecca like Detroit should help, as that’s where Volkswagen’s Canadian facility is being planned. It’s expected to have a footprint equivalent to 350 football fields and will create thousands of jobs in Ontario. Champagne stated that over the next 30 years, the Volkswagen battery plant is expected to generate over CAD 200 billion in value for Canada. If true, this deal could end up being worth tenfold in the long term.
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The HD arm of Hyundai has just released the first official images of the new, battery-electric HX19e mini excavator – the first ever production electric excavator from the global South Korean manufacturer.
The HX19e will be the first all-electric asset to enter series production at Hyundai Construction Equipment, with manufacturing set to begin this April.
The new HX19e will be offered with either a 32 kWh or 40 kWh li-ion battery pack – which, according to Hyundai, is nearly double the capacity offered by its nearest competitor (pretty sure that’s not correct –Ed.). The 40kWh battery allows for up to 6 hours and 40 minutes of continuous operation between charges, with a break time top-up on delivering full shift usability.
Those batteries send power to a 13 kW (17.5 hp) electric motor that drives an open-center hydraulic system. Hyundai claims the system delivers job site performance that is at least equal to, if not better than, that of its diesel-powered HX19A mini excavator.
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To that end, the Hyundai XH19e offers the same 16 kN bucket breakout force and a slightly higher 9.4 kN (just over 2100 lb-ft) dipper arm breakout force. The maximum digging depth is 7.6 feet, and the maximum digging reach is 12.9 feet. Hyundai will offer the new electric excavator with just four selectable options:
enclosed cab vs. open canopy
32 or 40 kWh battery capacity
All HX19es will ship with a high standard specification that includes safety valves on the main boom, dipper arm, and dozer blade hydraulic cylinders, as well as two-way auxiliary hydraulic piping allows the machine to be used with a range of commercially available implements. The hydraulics needed to operate a quick coupler, LED booms lights, rotating beacons, an MP3 radio with USB connectivity, and an operator’s seat with mechanical suspension are also standard.
HX19e electric mini excavator; via Hyundai Construction Equipment.
The ability to operate indoors, underground, or in environments like zoos and hospitals were keeping noise levels down is of critical importance to the success of an operation makes electric equipment assets like these coming from Hyundai a must-have for fleet operators and construction crews that hope to remain competitive in the face of ever-increasing noise regulations. The fact that these are cleaner, safer, and cheaper to operate is just icing on that cake.
With the Trump Administration fully in power and Federal electric vehicle incentives apparently on the chopping block, many fleet buyers are second-guessing the push to electrify their fleets. To help ease their minds, Harbinger is launching the IRA Risk-Free Guarantee, promising to cover the cost of anticipated IRA credits if the rebate goes away.
In the case of a Harbinger S524 Class 5 chassis with a 140 kWh battery capacity with an MSRP of $103,200, the company will offer an IRA Risk-Free Guarantee credit of $12,900 at the time of purchase, bringing initial cost down to $90,300. This matches the typical selling price of an equivalent Freightliner MT-45 diesel medium-duty chassis.
“We created (the IRA Risk-Free Guarantee) program to eliminate the financial uncertainty for customers who are interested in EV adoption, but are concerned about the future of the IRA tax credit,” said John Harris, Co-founder and CEO of Harbinger. “For electric vehicles to go mainstream, they must be cost-competitive with diesel vehicles. While the IRA tax credit helps bridge that gap, we remain committed to price parity with diesel, even if the credit disappears. Our vertically integrated approach enables us to keep costs low, shields us from tariff volatility, and ensures long-term price stability for our customers.”
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Harbinger recently revealed a book of business consisting of 4,690 binding orders. Those orders are valued at approximately $500 million, and fueled a $100 million Series B raise.
Electrek’s Take
Harbinger truck charging; via Harbinger.
One of the most frequent criticisms of electric vehicle incentives is that they encourage manufacturers and dealers to artificially inflate the price of their vehicles. In their heads, I imagine the scenario goes something like this:
you looked at a used Nissan LEAF on a dealer’s lot priced at $14,995
a new bill passes and the state issues a $2500 used EV rebate
you decide to go back to the dealer and buy the car
once you arrive, you find that the price is now $16,995
While it’s commendable that Harbinger is taking action and sacrificing some of its profits to keep the business growing and the overall cause of fleet electrification moving forward, one has to wonder how they can “suddenly” afford to offer these massive discounts in lieu of government incentives – and how many other EV brands could probably afford to do the same.
Whoever is left at Nikola after the fledgling truck-maker filed for Chapter 11 bankruptcy protection last month is probably having a worse week than you – the company issued a recall with the NHTSA for 95 of its hydrogen fuel cell-powered semi trucks.
That complaint seems to have led to the posthumous recall of 95 (out of about 200) Nikola-built electric semi trucks.
The latest HFCEV recall is on top of the 2023 battery recall that impacted nearly all of Nikola’s deployed BEV fleet. Clean Trucking is citing a January 31, 2025 report from the NHTSA revealing that, as of the end of 2024, Nikola had yet to complete repairs for 98 of its affected BEVs. The ultimate fate of those vehicles remains unclear.
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Electrek’s Take
Image via Coyote Container.
I’ve received a few messages complaining that I “haven’t covered” the Nikola bankruptcy – which is bananas, since I reported that it was coming five weeks before it happened and there was no “new” information presented in the interim (he said, defensively).
Still, it’s worth looking back on Nikola’s headlong dive into the empty swimming pool of hydrogen, and remind ourselves that even its most enthusiastic early adopters were suffering.
“The truck costs five to ten times that of a standard Class 8 drayage [truck],” explained William Hall, Managing Member and Founder of Coyote Container. “On top of that, you pay five to ten times the Federal Excise Tax (FET) and local sales tax, [which comes to] roughly 22%. If you add the 10% reserve not covered by any voucher program, you are at 32%. Thirty-two percent of $500,000 is $160,000 for the trucker to somehow pay [out of pocket].”
After several failures that left his Nikola trucks stranded on the side of the road, the first such incident happening with just 900 miles on the truck’s odometer, a NHTSA complaint was filed. It’s not clear if it was Hall’s complaint, but the complaint seems to address his concerns, below.