State-Subsidized Battery Plants in the Copperbelt and Canada: A Step Toward Integrated Critical Minerals Value Chains?

In order to encourage green transitions and integration between critical minerals extraction and battery production for electric vehicles (EV), both the governments of Zambia and Canada are subsidizing new EV battery plants.

In Canada, the federal government has partnered with the Government of Ontario and City of Windsor to subsidize the NextStar EV battery plant in Windsor, Ontario. The plant is owned by Stellantis and LG Energy Solution but will be receiving as much as $15 billion in tax incentives.  It is the first of several such projects being subsidized by the government, with other battery plants planned with Volkswagen and Honda. The Windsor project broke ground in 2022, began production on battery modules in October 2024, and is expected to be producing battery cells for automaker Stellantis in late 2025.

In Zambia, the battery plant initiative is being done in partnership with Democratic Republic of Congo. Additional assistance is being provided by Afreximbank and UNECA. While a location has not been finalized, an electric vehicle special economic zone between the two countries has been proposed. However, at this stage it is unclear what role the private sector or major powers such as the US, EU, and China will play in the project.

The purpose of this project is to compare these two projects in terms of their origins, key details, government support, expected benefits, and strategic importance for sustainable green transitions. Both projects are major industrial policy interventions to create new forms of comparative advantage in green technologies. However, Canada’s public-private partnership model works with major car manufacturers currently engaged in a transition to EV production and locates battery plants in major hubs for the North American auto industry. The working hypothesis is that although these two projects exist in vastly different political and economic contexts, there are numerous lessons to be learned from Canada’s support for the NextStar project. Additionally, comparison can help better-understand the limits of the possible for productive linkages from critical minerals in southern Africa.