In it for the long haul: Linamar invests $1.1 billion in next-gen EV tech
#37 of 43 articles from the Special Report: Money and Business Climate Solutions
Linmar supplies parts for Honda, which has an electric vehicle battery plant in Alliston, Ont. THE CANADIAN PRESS/Nathan Denette
Canadian industrial giant Linamar’s newly announced near-$1.1 billion investment in next-generation vehicle power train technologies is a vote of confidence in the long-term future of the country’s beleaguered automotive sector, according to a leading industry analyst.
The Ontario-based company aims to develop a range of novel power trains and other components for zero-emission vehicles (ZEVs) and electric vehicles (EVs), fueled by a capital package of $800 million in private finance and $270 million from federal and provincial coffers.
The investment comes at a tumultuous time for Canada's $100-billion strategy to transform the country into a powerhouse in the international EV supply chain, with auto giants including Volkswagen, General Motors and Ford — and several battery-makers — having pulled back from earlier plans to build manufacturing plants in Ontario.
However, Jeff Turner, director of clean mobility at Dunsky, a research house, believes the money being poured into Linamar’s Innovation Driving Green Technology (IDGT) project is proof the nascent Canadian EV ecosystem is heading in the right direction.
“There have been a lot of ups and downs politically and in the automotive market as well. But this is a clear indicator that this is an important industry that is growing,” he told Canada’s National Observer.
Tuner said despite the current “volatility” in the industry as well as in Canadian politics, the Linamar investment, which will create some 2,300 jobs in the company’s four Ontario manufacturing facilities, reflected long-term thinking.
"Looking forward decades"
“Clearly Linamar are looking forward decades to where the EV industry is going to be, not just weeks ahead to where things might land politically with our neighbour to the south,” he said, referring to the looming U.S. threat of a 25 per cent tariff on Canadian exports, including auto parts.
U.S. President Donald Trump has signed an executive order canceling existing EV subsidies in the country, a key market for future Canadian vehicles. And this comes on top of a survey by EY, a consulting firm, which found that domestic interest in EVs has stalled: of the 48 per cent of people who expected to be looking for a new car in 2025, only half said they would consider a zero-emissions vehicle, down two per cent year-on-year.
The Linamar investment, Turner noted, also shows that the ZEV/EV supply chain is bigger than just batteries, noting the company is focusing on a portfolio of technologies linked to electric motors and zero-emission power trains.
“Canada will have a big role to play in this part of the supply chain,” he said. “There is a clear path for the incumbents in the Canadian automotive industry for transitioning into the ZEV/EV space.”
Jim Jarrell, CEO of Linamar, said in a statement that the government-supported investment was “a great signal for the future of the automotive manufacturing sector in Ontario.”
Vic Fedeli, Ontario’s minister for economic development, job creation and trade, in a statement at the investment announcement, said: “Linamar’s billion-dollar investment will not only create thousands of new, good-paying jobs for Ontario workers; it will catalyze economic growth and reinforce our continued commitment to the province’s key sectors.”
"A win for the economy"
François-Philippe Champagne, Canada's minister of innovation, science and industry, said the project would help spur innovation in EV components and semiconductor manufacturing.
“This is a win for the economy, the environment and Canadian jobs, cementing our country’s position as a leader in the EV supply chain,” he said.
The current slowdown in Canada’s EV market is jeopardizing thousands of new manufacturing and battery industry jobs, opportunities for scores of sector suppliers, and Canada’s aim to be a leader in global critical minerals markets — as well as the goal of decarbonizing the country’s second-largest greenhouse gas emitter, transportation.
This is all happening against a backdrop of investment uncertainty resulting from Trump's tariff broadside, first threatened after his election last November.
Speaking to Canada's National Observer last month, Champagne said EV industry doommongers were being short-sighted. “Canada's EV sector has all the fundamentals to succeed in the world of the 21st century. Our ‘North Star’ is decarbonization, and EVs will be a big part of this.
“When I talk to automakers they are thinking very long-term. Not how things are today, but how, if they don't invest now, they will look back and see it only as a missed opportunity.”
In 2023, Canada’s automotive manufacturing sector contributed nearly $18.6 billion to Canada’s gross domestic product and directly employed over 129,000 Canadians.
The government’s Strategic Innovation Fund, which was tapped to support Linamar’s IDGT project investment plans, is channeling up to $1.5 billion toward projects in clean technologies, critical minerals and industrial transformation.
January 30th 2025
Comments
As long as Canada has high rates of car dependency built into suburbia and intercity travel, EVs can offer a direct and immediate decrease in petrol emissions.
A wise government (oh, that's a contradiction in terms ...) would heed world trends that are moving huge amounts of money into investments in renewables and clean tech. Mobility is one giant sector ripe for conversion to zero emission electricity. Another, and arguably the more important sector, is the power grid.
Investing in mass transit in cities and between cities will address emissions in both sectors of power consumption, mobile and stationary.
Should a new federal government get elected on building clean energy infrastructure (go Carney go!), then cities will benefit from far more efficacious urbanism where homes, businesses and vehicles are all 100% electrified with transit, walking and biking eventually taking the lead in transportation.
By all means build out battery and ZEV drive train plants, but also build out train/rail in all its permutations, bus plants and grid infrastructure in a parallel effort, knowing that the latter will incrementally predominate as cities and their suburbs shift their zoning away from car and petrol dependency.
Anyone who thinks an old white man, in his dotage, is going to stop the EV market is thinking like a luddite........or perhaps someone already invested in ICE technology. But take it from an owner of a Kona, since 2020..........the ride is superb, the savings on gasoline and minor repairs significant, and the feeling that you can too, travel....at your leisure, without any guilt about greenhouse gas emissions...the real freedom.
Owning a Kona even means we're back tenting, having let go of the tent trailer we used when the grandkids were small. They miss it......but we're planning a long road trip to NFL this summer....
.... people intent on saving the gas guzzler have their eyes in the rear view mirror. The future is electric. Canada is well positioned to take advantage of that future.......and do it with environmental concerns front and centre.