Tuesday, September 27
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Canada can build an electric vehicle industry worth $48 billion a year, but it must act now: report

As climate change shows its growing destructive power in floods and droughts around the world, even staunch advocates of the transition from fossil fuels to battery-electric vehicles know that electric vehicles alone won’t solve the problem.

But as the North American auto show opens with fanfare and pomp, a new report from two reputable Canadian research groups indicates that Canada has a brief window to become a major player in the transformation of an industry worth hundreds of billions of dollars a year into something more climate-friendly. – and make money doing it.

Not only that, but the report suggests Canada has a chance to break a long tradition of exporting minerals and raw materials for others to process into high-value goods. Instead, by building a local electric vehicle supply chain, the country has the opportunity to enter from the bottom and create a large and lucrative domestic industry.

All the ingredients

“Canada has all the right ingredients to be a battery powerhouse,” said Evan Pivnick of Clean Energy Canada, one of the authors of the new report. “But it is vital that Canada acts quickly and decisively or it risks wasting thousands of jobs and billions of dollars.”

Pivnick’s group, an energy and economics think tank based at British Columbia’s Simon Fraser University, partnered with Ontario’s Trillium Network for Advanced Manufacturing to create the report entitled Canada’s New Economic Engine.

The reason for the urgency, say the report’s authors, is that after a false start that could have ousted the Canadian auto industry from the US plan and launched a new trade warinstead, the Biden administration released a revised plan that takes into account the integrated nature of North American auto manufacturing.

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Canadian automakers breathed a sigh of relief after a US climate bill that would have seen consumer tax credits for US-made electric vehicles expanded to include electric vehicles, batteries and critical minerals produced in North America.

According to Brendan Sweeney, who has spent decades researching the Canadian auto sector, the industry has now gone from an existential threat to a stunning new opportunity. Not only has the country established automotive parts and assembly manufacturing, but it also has the essential ingredients to create the new electric battery infrastructure.

With the announcement of Stellantis and LG Energy of a battery manufacturing plant in Windsor, Canada has another essential part of the industry. But while the country could see two or maybe three more such operations before the end of the decade, Sweeney said that wasn’t Canada’s biggest advantage.

“Where we really see a unique opportunity for Canada [is to] building something that doesn’t exist, what we call the integrated battery materials industry,” said Sweeney, general manager of the Trillium Network for Advanced Manufacturing, in a phone interview this week.

A democratic exception

“Canada is the only democratically governed country in the world that has all the minerals needed to support a complete supply chain for electric vehicles,” he said. In a world plagued by autocrats and saber blows, this is important.

The key vision of the plan outlined in the report is that Canada would become not just a source of raw materials for export to China, Germany or a factory in Arizona, but an entire industry.

It is clear that government licenses and transport links, similar to those of former Prime Minister John Diefenbaker Routes to resources plan will be needed to extract the main minerals. But the second essential step is to develop an entire industrial strategy unseen in Canada since the 1960s, said the report’s authors.

Representatives from three levels of government and industry leaders join to announce the site of Canada’s first electric vehicle battery plant in Windsor. A new report suggests Canada could be a bigger player in the burgeoning electric vehicle industry. (Mike Evans/CBC)

“We have to avoid the mistakes we made for 150 years,” Sweeney said. And those mistakes include what Canadian economic historians call “grassroots trade” where Canada exported wheat, fish and iron for others to process into high-value goods.

Instead, modeled on the Canadian fertilizer and food processing industries and the traditional automotive industry itself, the idea is to create high-value battery components.

“We transform the minerals and metals that we mine in Canada into cathodic active materials with very high added value, anodic materials, electrolytes [the solution inside batteries]”, Sweeney said with some zeal. “We do that in Canada.”

Start-up capital and planning needed

By combining Canada’s auto assembly, parts trade, battery manufacturing and mining proficiency with the expansion of the country’s current expertise in battery materials, the report indicates that Canada is ideally positioned to become a world leader, adding an estimated $48 billion a year to the economy and creating hundreds of thousands of jobs across the country.

The plan would require billions of dollars in federal and provincial seed capital, but more importantly, it would require a thoughtful industrial strategy of the type developed by other industrial powers like Germany, linking every part of the integrated sector and planning it with the industry players.

“The construction of mines and the construction of batteries and electric vehicles, like any industry, will have environmental impacts,” said Merran Smith, director of innovation at Clean Energy Canada. “You need to ensure that mining is done in the most environmentally and socially responsible way, and that it is powered by clean electricity.”

Nickel ore in Indonesia. Canada is the only democratic country with all the minerals needed for batteries, Wednesday’s report said, and that adds value. (Yusuf Ahmad/Reuters)

With 80% of the country’s electricity generated carbon-free, it’s another way Canada has an advantage, allowing not only manufacturing, but also the minerals and components themselves to be largely carbon-free. carbon. She compares that to the world’s largest producer of batteries and electric vehicles, China, which still gets most of its electricity from coal.

As Smith said, cars are just one part of a global battery market that is expected to be worth at least US$360 billion by 2030. She said Canada has the potential to rank among the top five in the growing battery supply chain. .

According to the International Energy Agency, by 2040 the demand for battery minerals will have increased 30 times, not only for electric vehicles, but also for storage and other uses.

“Batteries are really going to be at the center of this new clean energy system,” she said. “A battery is going to be at the center of the electrical grid that lights up your home and heats up your office space.”

And she said the center is a place where Canada should be.

Follow Don on Twitter @don_pittis