Article: Industrial policy imitation: the perils of matching the US Inflation Reduction Act to attract battery plants Journal: International Journal of Automotive Technology and Management (IJATM) 2024 Vol.24 No.5 pp.40 - 72 Abstract: Implementation of the US IRA in 2022 significantly changed the practice of automotive-related industrial policy in the USA. We scrutinise its influence on a third country, Canada, where, in response to the IRA, more than CAD 42 billion has been committed to secure three battery plants with a value of CAD 19 billion. The purpose of our research is to determine if the incentive packages offered by the Canadian Government were truly necessary to secure the investments and if Canada can expect benefits comparable to those that similar support would engender in the USA, where the IRA was conceived. Based on our analysis, Canada's obligation to provide substantial incentives do not guarantee benefits on par with those of a core automotive country. Hence, as a semi-peripheral automotive nation, Canada's three new battery plants are unlikely to produce core country-like results, raising doubts about the effectiveness of Canada's strategy. Inderscience Publishers - linking academia, business and industry through research

Title: Industrial policy imitation: the perils of matching the US Inflation Reduction Act to attract battery plants

Authors: Greig Mordue; Bertha Vallejo

Addresses: Faculty of Engineering, W Booth School of Engineering Practice and Technology, McMaster University, Room 515, Engineering and Technology Building, 1280 Main Street West, Hamilton, L8S 4L8 Ontario, Canada ' TwINS Afrika, 12-14 5038 JL Tilburg, the Netherlands; INGENIO (CSIC-UPV), Universitat Politècnica de València, Camí de Vera s/n 46022 València, Spain

Abstract: Implementation of the US IRA in 2022 significantly changed the practice of automotive-related industrial policy in the USA. We scrutinise its influence on a third country, Canada, where, in response to the IRA, more than CAD 42 billion has been committed to secure three battery plants with a value of CAD 19 billion. The purpose of our research is to determine if the incentive packages offered by the Canadian Government were truly necessary to secure the investments and if Canada can expect benefits comparable to those that similar support would engender in the USA, where the IRA was conceived. Based on our analysis, Canada's obligation to provide substantial incentives do not guarantee benefits on par with those of a core automotive country. Hence, as a semi-peripheral automotive nation, Canada's three new battery plants are unlikely to produce core country-like results, raising doubts about the effectiveness of Canada's strategy.

Keywords: industrial policy; automotive; battery plants; Inflation Reduction Act; IRA; Canada, USA.

DOI: 10.1504/IJATM.2024.142134

International Journal of Automotive Technology and Management, 2024 Vol.24 No.5, pp.40 - 72

Received: 10 Apr 2024
Accepted: 18 Jun 2024
Published online: 08 Oct 2024 *

Title: Industrial policy imitation: the perils of matching the US Inflation Reduction Act to attract battery plants

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