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Guelph, Ont.-based Linamar Corp. says it will spend $1.1 billion at a series of facilities across Ontario so it can produce the next generation of “propulsion agnostic” automotive parts.
In addition to its $800 million investment, the federal government is committing up to $169.4 million through its Strategic Innovation Fund and Invest Ontario is committing an additional $100 million. The project is expected to create 2,300 jobs across four facilities located in Guelph, Stafford, Welland and Windsor.
The announcement comes as momentum around the electric vehicle transition is shifting. United States President Donald Trump signed an executive order to pause funding, at least temporarily, for a wide range of policies that supported EV adoption and the buildout of an EV supply chain. As the main destination for Canadian auto exports, Trump’s moves could carry ricocheting consequences for Canada’s auto sector.
But Linamar executive chair Linda Hasenfratz said her company took the position that initial EV adoption timelines were too optimistic and are likely to take longer than anticipated.
To avoid “stranded capital,” her company adopted a strategy focused on flexible production platforms that can be retooled as sales shift in vehicle categories: battery electric, hybrid, fuel cell or internal combustion engine vehicles.
“We’re going to ride out what’s going to be a rocky decade of ups and downs in terms of volumes in the different products, the different vehicle types,” she said.
Hasenfratz said consumers will drive the pace of the transition, and their preferences will vary based on their needs.
For example, EVs will likely be more attractive if you live in an urban area and drive shorter distances than if you need to drive longer distances on a regular basis. Either way, the internal combustion engine is likely to remain popular with some consumers for a long time, she said.
Looking at the EV transition more broadly, Hasenfratz said the scale of the automotive industry and the capital required to transform it are massive and not always fully appreciated.
“People overestimated EV adoption in the short term and underestimated it in the long term, which is pretty common,” she said. “You have to stay flexible; there’s a lot of uncertainty.
The federal government emphasized its funding support as more explicitly tied to the development of an EV supply chain.
“Today’s announcement highlights Canada’s skilled workforce and booming battery ecosystem,” Industry Minister François-Philippe Champagne said in a separate release. “Linamar’s groundbreaking project will drive innovation in EV parts and semiconductor manufacturing.”