'The more Canada goes big on batteries, the more jobs and economic benefits await': study

If Canada “plays its cards right,” it has potential to build a domestic electric vehicle (EV) battery supply chain that could support up to 250,000 jobs by 2030 and add C$48bn ($35.6bn) to the national economy annually, according to a new study.

The 28-page analysis was written by researchers at Clean Energy Canada, a climate and clean energy programme at Simon Fraser University in British Columbia, and the Trillium Network for Advanced Manufacturing in Ontario.

They argued while Canada has received several headline new battery investments led by a $5bn factory commitment from automaker Stellantis and LG Energy Solution in Windsor, Ontario, the success of its supply chain remains largely dependent on rapid national government action.

“The opportunity to build a fully integrated EV battery supply chain is in front of us. The work has begun, but there is lots more to do,” said Brendan Sweeney, managing director of Trillium.

The study identifies six ways in which Canada should channel its efforts to achieve its battery building potential.

First, is to develop a national battery strategy that “connects dots” across the supply chain and guides industrial development. Second, is build the workforce. Third, is helping investors meet their project land and infrastructure requirements, and then delivering “predictable and efficient” review processes to spur development.

Fourth, is for Canada to support and expand policies that grow the North American EV market by increasing domestic demand. Canada has committed to a 60% electrification target for new car sales by 2030 en route to 100% by 2035.

Fifth, Canada needs to promote its “clean battery brand” advantages such as critical mineral resources, abundant clean energy, and proximity to the US, to attract investment and increase export opportunities.

Lastly, the study recommends Canada scale-up homegrown and innovative clean battery technology companies with its own investments and leverage those from multinationals in the country.

While the supply chain involves nine stages from mineral exploration to battery recycling, Canada should focus on battery cell manufacturing, integrated battery material manufacturing, and EV assembly, according to the study.

“Canada needs to be smart about where it focuses its efforts,” the study said, referring to the entire supply chain. “While Canada could do it all, a more effective strategy would double down on a few key stages where the opportunity is greatest.”

In battery cell manufacturing, China presently commands 80% of the world’s capacity. “Canada must quickly up its game if it wants to be a major player,” said the study. EV assembly is a natural fit given the country’s existing automaking expertise and facilities.

Building an integrated battery material manufacturing capacity plays to Canada’s strengths in clean electricity, critical minerals resources, and battery recycling leadership. It can create an efficient supply chain by mining, processing, and recycling minerals in proximity to one another.

Canada has most of the metals and minerals used in the battery supply chain. Cobalt, graphite, and nickel used in cathodes; copper used in wiring and interconnections for batteries and fast chargers, and some rare earth elements. There are now 21 rare earths projects in development in the country.

Missing are lithium, the critical element in lithium-ion batteries used to transfer the charge, and manganese, the primary material found in battery anodes.

EV sales represented close to 9% of the global car market in 2021, and the International Energy Agency estimates that number could increase to as much as 35% in 2030.

Consultants McKinsey forecasts that the global market for battery cells will grow, on average, by more than 20% per year until 2030, reaching at least $360bn.