Building a domestic supply chain can help secure Canada’s role in an EV future
The Canadian automotive industry, emerging with renewed energy following the pandemic and resulting supply chain disruptions, is inevitably moving towards a future dominated by electric vehicles.
The challenges of the past few years served as a stark wake-up call for Canada about the vulnerabilities of relying on a supply chain system largely out of our control and the need to fortify domestic supply chain mechanisms.
One of the areas in which there will be an increasing need for domestic capacity building is in lithium-Ion batteries.
Recently, Canada achieved a significant milestone by surpassing China to claim the top spot in Bloomberg’s Global Lithium-Ion Battery Supply Chain Ranking — marking the first time ever that China has not held the number one position.
The report suggests Canada’s consistent advancements in manufacturing and production, coupled with strong environmental, social, and governance credentials, have positioned it as a world leader in building secure and sustainable lithium-ion battery supply chains.
It goes on to say, our close integration with the U.S. automotive sector, driven by the Inflation Reduction Act’s goal of restructuring supply chains to build stronger relationships with geopolitical allies, has further solidified this position.
The ranking is a result of comprehensive policy commitments at both the provincial and federal levels, highlighting Canada’s commitment to shaping the future of battery supply chains.
At the same time, Dentons Law Firm reports Canada is a prime location for ethically sourced minerals that battery cell manufacturers need to create clean, sustainable products.
It also suggests that our country has a proven track record as a mining powerhouse which can be a key differentiator in helping to boost the growth of the local battery sector — making a strong case for why Canada serves as a beacon for EV and battery production investment, according to Denton.
A report from the International Trade Administration explains that Canadian Tier 1 and 2 automotive manufacturers have very large supply chains to cover a variety of high-tech needs for their processes, and that many companies are building automotive assemblies and systems in locations in Canada. This includes battery-making investments from the Volkswagen Group and Stellantis in partnership with LG Energy Solution.
Canada seems primed to leap headlong into these opportunities. But how do industry giants from outside the country feel? One only needs to look at the recent rumours swirling around Honda investing a staggering $18.5 billion into EV and battery production in the small, working-class town of Alliston, Ontario.
While the details of the potential Honda investment remain up in the air, the fact it’s being considered highlights Canada’s growing reputation as a stable and complete supply chain for EV manufacturing.
Our country’s strategic focus on tax credits, coupled with its existing ecosystem and abundant renewable energy, positions Canada as a global leader in the electric vehicle revolution.
To fulfill zero-emission vehicle mandates set by federal and provincial authorities, one of the things that car manufacturers must do is to prioritize their supply chain operations. The challenges following the pandemic have really shone a light on the importance of various supply chain phases, spanning material acquisition, production, and recycling.
With significant investments taking place and other developments appearing to be on the horizon, we might just be witnessing the unfolding of a next chapter in Canada’s automotive legacy.
