After announcing, with great fanfare, that they would be opening a plant to produce electric car batteries in Loyalist Township, Umicore Rechargeable Battery Materials Inc. has now decided to delay further work on the facility owing to “significant worsening of the EV market context and the impacts this has on the entire supply chain.”
The plant was expected to be an economic boon to all of Eastern Ontario, creating around 600 jobs in the region. However, following the cancellation of a contract Umicore had been negotiating with a Chinese company, and the fact that demand for electric vehicles has fallen off over the past year, the company decided not to proceed with the building project, which was slated to cost around $2.7 billion.
In a statement, the company said: “For Umicore, customers’ demand projections for our battery materials have steeply declined recently”. It is now adapting operations “to the new market reality,” and will be making a complete review of its battery materials business.
The federal and provincial governments had strongly supported Umicore’s projects, committing almost $1 billion to the Loyalist Township initiative. It is understood that none of that money had actually been paid out to Umicore at the time of the announcement about the delay.
Other major corporations involved in electric battery production, such as Ford, have also announced cutbacks in their plans for future battery production owing to the downturn in demand for electric vehicles. Umicore expects to make a decision on the future of the plant by the end of the first quarter of 2025.