Yahoo Finance Electric vehicle batteries could add $48B annually to Canada's economy: report
An electric vehicle battery supply chain in Canada could add $48.2 billion annually to the nation’s economy and support up to 250,000 jobs by 2030, according to a new report calling for a sweeping government strategy spanning mineral exploration to battery recycling.
Clean Energy Canada and the Trillium Network for Advanced Manufacturing point to a “booming” market for batteries, citing the International Energy Agency’s call for EVs to claim 35 per cent of the global car market in 2030, up from nine per cent in 2021.
“A Canadian EV battery supply chain isn’t just a nice-sounding idea. It’s a very real, very large economic opportunity with potential winners across Canada and across industries,” the report says.
According to Bloomberg NEF, Canada ranks fifth globally in terms of battery supply potential, behind China, the U.S., Germany, and Sweden.
That $48.2 billion annual GDP contribution is the report’s most ambitious scenario. It requires nearly all of Canada’s automotive assembly capacity to be focused on EVs. New mines, new investments in battery materials, cathode production, and recycling would be needed.
Canada would also have to attract one more major, and two smaller, battery cell facilities. The country landed its first battery gigafactory in March, when automaker Stellantis and South Korean battery giant LG Energy Solution announced plans to invest $5 billion to open a new electric vehicle battery production plant in Windsor, Ont.
On top of that, light-duty vehicle sales would need to hit a zero-emissions target of 90 per cent by 2030, with the U.S. hitting its target of 50 per cent. Plus, medium and heavy-duty vehicle sales would need to be 35 per cent and 23 per cent in Canada and the U.S., respectively.
“While that might sound like a tall order, it’s not an unrealistic one,” the report’s authors wrote. “The choices Canada makes over the next seven years will determine which outcome we achieve.”
In July, Prime Minister Justin Trudeau said Canada is making a “big bet” on becoming a key player in the global EV supply chain. His remarks followed news that Belgian metals refiner Umicore SA is set to build a $1.5-billion facility near Kingston, Ont.
Two weeks later, Canada scored a major victory when U.S. lawmakers allowed electric vehicles made in Canada to qualify for a consumer tax credit. The original bill, a key part of U.S. President Joe Biden's climate agenda, had previously restricted the credits to vehicles produced by unionized carmakers in the U.S.
The report recommends Canada “double down on a few key stages” of the battery supply chain in the near term, such as EV assembly, battery cell manufacturing, and clean battery materials production.
Canada’s 2022 federal budget includes $3.8 billion to advance the government’s critical minerals strategy. Ontario, Quebec, Alberta, and Newfoundland and Labrador have each introduced critical mineral strategies that emphasize EV battery minerals.
If no additional government action is taken, the report concludes Canada’s battery supply chain will create 60,000 jobs by 2030, and contribute $12 billion annually to the nation’s GDP.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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