Skip to content

Canada's Business and Tech Newsroom

  • Professional Subscription
  • Partnerships & Advertising
  • Licensing & Syndication
Log In Subscribe
Welcome,
  • My Account
  • Log Out
  • Business
  • Tech
  • National
  • The Big Read
  • Briefings
  • Commentary
Search
Log In Subscribe
Welcome,
  • My Account
  • Log Out
News

As the electric-vehicle transition races forward, can the Net Zero Accelerator keep up?

When the federal government announced a $5-billion commitment to the Net Zero Accelerator in last month’s budget, it caught the attention of Canada’s auto sector. The program, intended to speed up decarbonization in a range of industries, is a “game-changer for [the] Canadian zero-emissions vehicles business,” according to a budget-day tweet from Flavio Volpe, head of the Automotive Parts Manufacturers’ Association.

News

As the electric-vehicle transition races forward, can the Net Zero Accelerator keep up?

By Anita Balakrishnan
Two electric vehicles getting charged at the General Motors plant in Oshawa, Ont. in November 2018. Photo: Lars Hagberg/AFP via Getty Images
May 31, 2021
A A
A Small A Medium A Large
Share

Gift

Share

When the federal government announced a $5-billion commitment to the Net Zero Accelerator in last month’s budget, it caught the attention of Canada’s auto sector. The program, intended to speed up decarbonization in a range of industries, is a “game-changer for [the] Canadian zero-emissions vehicles business,” according to a budget-day tweet from Flavio Volpe, head of the Automotive Parts Manufacturers’ Association.

But a month later, the reaction from the electric-vehicle industry is decidedly mixed.

While Innovation, Science and Economic Development Canada told The Logic that some of the Net Zero Accelerator funding will go toward developing an end-to-end battery ecosystem in Canada, a recent report from Clean Energy Canada echoes what those in the industry said in a series of recent interviews: the program is ambitious, but if the federal government is serious about building a domestic EV battery industry, it won’t be nearly enough on its own.

Talking Point

With the U.S. government promising billions to the electric-vehicle industry, those in the industry say there is little room for plodding from the Canadian government. With the new Net Zero Accelerator pledging to speed along any company that can cut emissions, some are hoping money will spread to a variety of homegrown, forward-looking technologies—not just large multinationals.

The Liberals’ $5-billion, seven-year budget pledge added to a December 2020 announcement of $3 billion to be spent over five years. The influx makes the Net Zero Accelerator one of the better-funded government initiatives among a slew of budget proposals that added tens or hundreds of millions of dollars to programs like the supercluster initiative, Industrial Research Assistance Program and Critical Battery Minerals Centre of Excellence. 

The government has said it plans to use the accelerator, which draws its funding from the Strategic Innovation Fund, to transform “key sectors” such as steel, aluminum and cement, and speed up clean-technology adoption for the auto and aerospace sectors. While it has yet to announce any funding through the accelerator, lobbying records show that the Net Zero Accelerator has attracted preliminary attention from at least one oil company, as well as the cement industry. 

Though the term “accelerator” is often used for programs that mentor startups, ISED said the Net Zero Accelerator would not offer any formal mentorship, outside of program analysts that monitor for compliance and help companies with the claims process. 

Mohammad Hussain, speaking for Innovation Minister François-Philippe Champagne, told The Logic that the program is designed to create middle-class jobs and make Canada a top destination for investments in clean technology. Champagne’s office pointed to almost $6 billion in private-sector investments from automakers as proof the government’s policies are “showing results.”

The auto sector, meanwhile, is reaching a crucible. Global automakers have announced plans to pivot to electric vehicles, opening a window for Canadian companies to jump in and supply parts that have never before existed at this scale. Those in the industry said government funding could be the lifeline that Canadian firms need to compete—if the money is deployed efficiently.

Brian Kingston, CEO of the Canadian Vehicle Manufacturers’ Association, said the federal government and provincial governments must both be prepared to move quickly with funding and be flexible to compete with other countries clamoring for business. 

“As the industry pivots to electrification … Canada has to make a compelling case to global automakers,” said Kingston, whose group represents Stellantis, Ford and General Motors. 

“The transformation right now underway in the auto industry is so significant and changing so quickly. Just one example is when you look at battery chemistry, it isn’t a foregone conclusion in terms of what battery chemistry will ultimately be the prevailing technology that we see in vehicles on the road. So there has to be flexibility.”

The amount of money required, though, is daunting. U.S. President Joe Biden’s plan—a goliath US$174-billion spending campaign, promising to splash out on half a million chargers and other consumer incentives—is just one of the high-stakes EV bets governments around the world are making. The Clean Energy Canada report notes China, Japan and South Korea currently dominate global battery production, while the EU has invested over €6 billion in its supply chain with the goal of being self-sufficient in EV batteries by 2025. It’s a stark warning about the scale of spending necessary to catalyze a Canadian industry. The Clean Energy Canada report said it will take $15 billion in public funding just for an effective domestic battery supply-chain fund. 

There’s also the challenge of execution. Beyond the enormous expenditure, the report adds that the fund must be accessible and work expediently, “something the existing Strategic Innovation fund has historically struggled with.”  

Patrick Gervais, vice-president of marketing and communications at Lion Electric, said applying to the Strategic Innovation Fund seemed to be a slow process for the Quebec company at first, as executives tried to navigate which program to pursue. But once the process began, things sped up over five or six months, he said. Gervais said the company was ultimately happy with the pace of the government’s due-diligence process and would consider applying to the new Net Zero Accelerator part of the fund in the future—especially given that getting a single demo vehicle to a potential customer can cost hundreds of thousands of dollars, not to mention the cost of safety certifications like Altoona Testing.

Ontario-based Electrovaya, which makes lithium-ion batteries, has an application pending with the Strategic Innovation Fund. CEO Sankar Das Gupta said the Net Zero Accelerator gives him hope that Canadian companies may not be “left behind” during the electric-vehicle transition. Das Gupta hopes to make the case to the government that Electrovaya will have an outsized impact on reducing emissions by focusing on industrial vehicles, which run more hours per day than the average consumer’s car that’s sitting in a workplace parking lot or driveway.

In the past, Das Gupta said, Canadian companies sometimes struggled to get experimental vehicles on the road due to policies that didn’t hamper European or U.S. competitors as much.

Das Gupta calls this the Canadian government’s “branch plant” approach to investing, which favours established, multinational auto companies that are headquartered abroad—rather than homegrown Canadian brands.

Greig Mordue, an associate professor at McMaster University, is skeptical that the new Net Zero Accelerator can shake that “branch” mentality for electric-vehicle research as the government understandably looks to companies that can provide the most stable jobs. 

“Innovation occurs in absolute proximity to the head offices of the industry’s global leading firms, and the global leading firms are the Volkswagens and General Motors and Toyota, BMW—so that means it’s Germany and Japan and Michigan,” said Mordue, whose background includes roles in government and at Toyota Motor Manufacturing Canada. Mordue’s research on autonomous-vehicle patents suggests that while Canada had an early lead in developing autonomous vehicles, “they all eventually reverted to Detroit, Stuttgart, Japan and Korea … [and] California.” The same could happen to electric vehicles, he said.

That echoes the question within the industry of how the federal government will decide whether to favour established players or upstarts as it spends. 

Asked if the program would dedicate a certain amount of funding to Canadian founders or startups, ISED said the Net Zero Accelerator would follow the same rules as the Strategic Innovation Fund—which requires a minimal total project size of $20 million—and which is “open to all companies incorporated in Canada and supports the investment attraction of key global mandates while also scaling up Canadian-owned companies.” 

Mike Andrade, CEO of Morgan Solar, was part of a cleantech Economic Strategy Table that previously called for the government to focus funding on “high-potential” domestic firms in fields and technologies where Canada had existing strength, rather than just reducing the oil and gas industry’s emissions.

Andrade said he hopes the Net Zero Accelerator funders will go beyond funding large multinational incumbents in the auto industry and other cleantech sectors.

“The areas where I feel that we are underinvesting are the new, disruptive technologies,” said Andrade. “There’s not the lobbying organizations in the same way, there’s not the capital budgets. ”

Gift the full article

The Canadian Urban Transit Research & Innovation Consortium is proposing two vehicle projects for the Net Zero Accelerator, shifting from applications the group had prepared for another part of the Strategic Innovation Fund, Stream 5. CUTRIC CEO Josipa Petrunic said she’s hoping the broad mandate of the Net Zero Accelerator will encourage a wider range of companies to apply, compared with past programs that were auto-specific.

For instance, said Petrunic, government funders have in the past focused on technologies that could immediately reduce greenhouse-gas emissions, ignoring innovations that could have a big impact on emissions further down the line. 

“They ignored, therefore, all the software innovation, data innovation and cybersecurity innovation that actually would have resulted in emissions reduction today,” she said. 

Petrunic warned against excessive bureaucracy, but said some simple rules should ideally be attached for companies that get the net-zero funding, including an accounting of greenhouse-gas-emission savings, job-creation projections that meet a standard definition, and even caps on executive pay to encourage larger legacy companies to pull as much funding as they can from their own margins before looking to the government’s coffers.

#batteries #electric vehicles #Net Zero Accelerator #Strategic Innovation Fund

Loading...

Thanks for sharing!

You have shared 5 articles this month and reached the maximum amount of shares available.

Close
This account has reached its share limit.

If you would like to purchase a sharing license please contact The Logic support at [email protected].

Close
Want to share this article?

Upgrade to all-access now

Close
Gift the full article!

You have gifted 0 article(s) this month and have 5 remaining.

Copy link and gift
Copy Link
Email to a friend
Send Email
Gift on Social Media

Recipients will be able to read the full text of the article after submitting their email address. They will not have access to other articles or subscriber benefits.

Photo: Lars Hagberg/AFP via Getty Images

Most Popular This Week

Andrew Forde, wearing a beige tweed blazer, black slacks and a white sweater, speaks on a stage at the Elevate conference in Toronto with three large blue screens in the backdrop. One screen displays the session topic, AI, another displays the logos for sponsors KPMG and Google, and a third screen depicts a photo of a stop sign covered in stickers. The stop-sign photo is labelled, “Stickers that beat supercomputers.”
News

KPMG’s AI whisperer says some Bay Street firms are falling into a productivity trap

By Anita Balakrishnan
The Big Read

ApplyBoard faces a reckoning as Canada’s immigration boom turns into a bust

By Claire Brownell and David Reevely
A shot of Anthony Hu in a semi-dark office, with his face illuminated by two computer screens.
The Big Read

Anthropic’s Mythos cracked software open like an egg. It’s just the beginning

By David Reevely
Susan Hawkins, chief executive officer of Payments Canada gestures with her hands as she speaks on stage in front of black screen at the Payments Canada Summit in Toronto.
Exclusive

Not all banks and fintechs will get access to the Real-Time Rail at launch

By Claire Brownell

In-depth, agenda-setting reporting

Great journalism delivered straight to your inbox.

News

Canada’s new AI strategy aims to boost firms selling overseas

By Murad Hemmadi

Briefing

Anthropic says world needs option to slow AI development, as models learn to self-improve

By Murad Hemmadi   |   Jun 5, 2026 | 3:37 PM ET

Ottawa taps the brakes on efforts to speed up project permitting

By Laura Osman   |   Jun 5, 2026 | 2:52 PM ET

Kevin O’Leary scales back Wonder Valley Utah plans after objections from a key state legislator

By David Reevely   |   Jun 5, 2026 | 1:42 PM ET

Best business newsletter in Canada

Get up to speed in minutes with insights and analysis on the most important stories of the day, every weekday.

Exclusive events

See the bigger picture with reporters and industry experts in subscriber-exclusive events.

Membership in The Logic Council

Membership provides access to our popular Slack channel, participation in subscriber surveys and invitations to exclusive events with our journalists and special guests.

Recent Popular Stories

News

Canada’s surprise plan to buy Saab command jets leaves competitors seeking answers

By David Reevely   |   May 29, 2026
A closeup of a scale model of a jet covered in pixellated camouflage, with sensor equipment attached to the top of its fuselage. There are civilians and uniformed military personnel milling in the background.
Exclusive

Canada awards Ford $464M to make F-Series trucks in Ontario

By Murad Hemmadi, Anita Balakrishnan and Joanna Smith   |   May 7, 2026
Blurred red, white and black cars zoom down a street in front of Ford’s Oakville, Ont., assembly plant on Friday April 5, 2024.
News

European and Asian firms want a stake in Canada’s photonics factory, Joly says

By Murad Hemmadi   |   May 7, 2026
The Big Read

ApplyBoard faces a reckoning as Canada’s immigration boom turns into a bust

By Claire Brownell and David Reevely   |   May 27, 2026
Exclusive

RBC Insurance chief to depart in shakeup of key strategic role

By Chaimae Chouiekh and Anita Balakrishnan   |   May 27, 2026
Low-angle view of an RBC logo sign in front of a tall glass-and-concrete office tower, with surrounding skyscrapers visible in the background.
Exclusive

Shopify makes cuts to its operations team in latest round of layoffs

By Aleksandra Sagan   |   May 4, 2026
Tobias Lutke in a black shirt and grey jeans sitting on a couch, gesturing with both hands pinching the air as he speaks

Canada's most influential executives and policymakers are reading The Logic

  • CPP Investments
  • Sun Life Financial
  • C100
  • Amazon
  • Telus
  • Mastercard
  • bdc
  • Shopify
  • Rogers
  • RBC
  • General Motors
  • MaRS
  • Government of Canada
  • Uber
  • Loblaw Companies Limited
logic-logo

Canada's Business and Tech Newsroom

100% human-crafted journalism

Newsroom

  • News Tips
  • AI Policy
  • Editorial Disclosures
  • Story Pitches

Company

  • About Us
  • Terms of Service
  • Privacy Statement
  • Corporate Information

Contact

  • Contact Us
  • Advertise
  • FAQs
  • Work at The Logic

© 2026 The Logic Inc. All Rights Reserved.

Trusted by leaders

Error

Account creation failed.

Please email us at [email protected].

Create Account

[wppb-register form_name=”cozmo-registration-form-for-modal”]

I do have an account
Login
or

[wppb-login]

I don’t have an account