Canadian governments have been on a spending spree to build a new industry around electric-vehicle batteries from the ground up. LG and Stellantis are together committing $5 billion to a battery plant in Windsor, Ont., while Bécancour, Que., is becoming an automotive hub in its own right, attra Contact online >>
Canadian governments have been on a spending spree to build a new industry around electric-vehicle batteries from the ground up. LG and Stellantis are together committing $5 billion to a battery plant in Windsor, Ont., while Bécancour, Que., is becoming an automotive hub in its own right, attracting a joint General Motors-POSCO venture and other multinationals as well as industry upstarts like StromVolt. Meanwhile, the country''s critical minerals strategy got up to $3.8 billion in the most recent federal budget.
To provide a look at how the nascent EV battery supply chain industry is developing in Canada, The Logic compiled battery announcements and reports from its archives and interviews over the past year, talked to experts and reviewed the operations of dozens of companies listed on the Toronto Stock Exchange and TSX Venture Exchange to find examples of critical mineral miners.
While this methodology doesn''t capture every possible supplier in the country, it gives a glimpse into where Canada most urgently needs to attract investments and talent to build a sustainable industry.
Canada has been pitching its mines-to-mobility strategy and landing deals to build big battery-material plants, from LG to GM. That has opened opportunities for plant suppliers—but is building a complete EV battery in Canada possible? Industry experts say there are still crucial holes that leave them reliant on shipping or importing from China, which dominates the market.
"Strategically, I think the government is actually doing a good job here by bringing in these kinds of anchor investors like GM and POSCO, BASF, Stellantis and LG," Dan Blondal, CEO of Nano One Materials, told The Logic. "They''ll drive further investment."
"In Europe, they''ve launched this whole battery thing, but they''re stuck with adopting a midstream that has got all these inefficiencies. We in Canada have a tremendous opportunity here to set ourselves apart from everywhere else in the world by cleaning that up," he said.
Potential gaps, competition or hurdles:As of the first half of 2021, more than 90 per cent of global EV battery capacity came from seven companies, all in Asia: CATL, LG Energy Solution, Panasonic, Samsung SDI, BYD, SK Innovation and CALB, according to Toronto-based research firm Adamas Intelligence. North American suppliers will have to compete with a well-oiled machine.
"There''s virtually no [lithium iron phosphate] battery production, other than a very small footprint in Quebec, and in North America there''s very little cathode production," said Blondal.
"There''s a lot of mushiness in the supply chain, particularly in North America, that needs to be resolved. Many components are having to be brought in from overseas, and for us personally, we''re trying to develop it all with a North American, or at least North American-friendly, context."
"It takes far too long," Dahn said. "These companies should be encouraged, not discouraged, and in fact even pushed by the federal government to expand in Canada."
Example of Canadian suppliers:Magna (Ontario) isbuildinga 170,000-square-foot facility and hiring 150 people to build battery enclosures in Chatham, Ont., for the Ford F-150 Lightning.
Potential gaps, competition or hurdles: On a February earnings call, Magna CEO Swamy Kotagiri said the company''s enclosures business is a bet that it expects to keep driving growth for years to come. To that end, the company is plowing in cash, even amid rising labour and commodity costs. It also just broke ground on a New Mexico plant that will make inverters, motors and on-board chargers with LG for GM''s EVs.
"As we sit here today and look at the cadence of the sourcing activity, we don''t see a significant shift as of yet, but that is to be seen," said Kotagiri. "If you look at what we have in terms of footprint and capabilities, we should be well positioned to address that piece."
Examples of Canadian suppliers: Tesla, which has two manufacturing facilities and three research and development centres in Canada, is building another facility in Markham, Ont., to manufacture battery-making equipment. Novonix (Nova Scotia) offers cell-testing services and equipment used by Panasonic, CATL, LG Chemical, SK Innovation and Samsung SDI.
The National Research Council of Canada also has equipment hubs, including a pilot-scalebattery manufacturing linefor prototypes in Boucherville, Que., that has specialmachines, a batterytesting labin Ottawausedby both regulators and manufacturers, and an R&D group thatgivesmembers access to "unique technologies."
Potential gaps, competition or hurdles: Canada does not make the machinery needed for some types of mineral processing and must import it from countries like China and Japan, according to testimony for the House of Commons Standing Committee on Natural Resources summarized in a report last year. This "intermediate" step for materials like graphite or aluminum is a "weak link" in the critical minerals supply chain, experts said.
What it is:The most common types of EV batteries todaypushlithium ions back and forth from an anode layer to a cathode layer, passing through another layer of electrolyte. Cathodes are the electrodes that have the biggest impact on range, and automakerssaythey''re also the most costly part of batteries, typically containing critical minerals like nickel, manganese, cobalt or iron phosphate.
Canada is one of two countries with all of the minerals and metals needed for cathode production, and unlike Australia, it has an auto manufacturing footprint. But metals and minerals from mines must be converted into an electrochemically active material through two steps: precursor production and cathode active material (CAM) production. This process is often done in Asia, but Canada has seen a few key investments in CAM plants over the past year, some from companies headquartered overseas like BASF.
Examples of Canadian suppliers:GM-POSCO(Quebec, headquartered abroad),BASF(Quebec, headquartered abroad),Novonix(Nova Scotia), Nano One Materials (B.C.; Quebec)
Potential gaps, competition or hurdles:The CAM plants filled a big gap in the supply chain, but Canada could still beef up on precursor materials, said Kunal Phalpher, chief strategy officer of Canadian battery and scrap recycling company Li-Cycle.
"PCAM or precursor is the step between the raw material, like nickel and cobalt and cathode active material. There''s an intermediate process," said Phalpher. "That''s a North America-wide gap that Canada could help fill."
Novonix CEO Chris Burns,whose company''s new Tennessee plant aims to be a large-scale supplier of synthetic graphite anode material, has previouslywarnedthat "essentially zero battery-grade anode material is currently produced stateside."
Potential gaps, competition or hurdles: About 70 per cent of graphite used in battery anodes today comes from China, leaving a hole in the raw materials chain. Maciej Jastrzebski, CEO and co-founder of Canadian lithium-metal anode company Li-Metal, noted that even though Canada has rich supply chains for metals like copper, suppliers here don''t necessarily process battery-grade materials like copper foil.
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