Electrovaya benefits from U.S. factory after Canada loan denial

Electrovaya, a lithium-ion battery maker based in Mississauga, Canada, has opened a new factory in New York after Canada denied its request for financial support in 2021. The company expressed disappointment but quickly adapted by relocating to the U.S., where it received $50.8 million in loans and state subsidies. The new factory, set to open this spring, will create 250 jobs in the U.S. Following the rejection of its funding request, Electrovaya was surprised to see the Canadian government committing large sums to foreign companies for battery plants. Electrovaya's CEO, Rajshekar DasGupta, noted the feeling of being overlooked, stating it seemed unfair that foreign companies received support while a local innovator did not. However, the decision to build in the U.S. may have turned out to be beneficial. Because of tariff implications linked to a trade war initiated by former U.S. President Donald Trump, products made in the New York factory will not face the same tariffs as those produced in Canada. This might provide Electrovaya with a competitive edge in the U.S. market. Electrovaya caters to a specific market, supplying batteries for electric forklifts and other material-handling vehicles. Its clients include major companies like Walmart and Toyota. The company expects revenue to rise significantly, projecting around $60 million this year and over $100 million next year. Electrovaya's history includes both successes and challenges. Founded nearly 30 years ago, the firm has previously partnered with big names like General Motors and NASA. After facing issues with an earlier venture in Europe, Electrovaya pivoted to warehouse applications and has since developed a robust strategy to mitigate trade risks. The decision to establish operations in New York, as opposed to Ontario, aligns well with its goal of tapping into the U.S. market effectively. This choice not only helps the company avoid potential tariffs but also positions it strategically within the growing cleantech sector in the U.S.