Will EV batteries come from Canada?

Ontario Premier Doug Ford’s vision of a made-in-Canada battery supply chain to support a budding electric-vehicle industry will require a massive buy-in from the auto and mining sectors to become a feasible and necessary goal, industry experts say.

“It is very possible for Canada to pull it all together,” said Conrad Layson, alternative-propulsion analyst at AutoForecast Solutions, an industry forecaster based in Chester Springs, Pa. “Canada has the raw materials and the knowledge base. What is lacking is the physical infrastructure.”

The Premier has said Ontario — and Canada as a whole — could become leaders in battery manufacturing. And multibillion-dollar plans by the Detroit Three to build electric vehicles at their Ontario plants mean Canada will soon have EV assembly.

Connecting the two ends of the supply chain will require hard work and money, experts said. But thanks to an abundance of natural resources such as lithium and cobalt, Canada is positioned to take advantage as the demand for EV batteries rises.

Carmine Pizzurro, co-founder of the EV infrastructure company eCamion and the manager of the former Delphi battery plant in Oshawa, Ont., said such facilities would need to be built close to EV assembly plants for high-volume production.

Electric vehicles can have hundreds or thousands of individual cells, depending on the style of batteries used in packs.

“I cannot see Ford Oakville building their electric vehicles, particularly at high volume, importing packs from another country. ... It has to be a synchronous plant,” like seating plants that are often in close proximity to assembly plants, Pizzurro said on the Jan. 15 edition of Automotive News Canada’s weekly podcast.

Automakers and suppliers are already accustomed to localized parts production of larger components, such as engines, seats and doors, which are difficult to ship long-distance.

“It’s an unbelievable amount of battery cells that have to be built [for EV models], and I can’t see them being shipped all over the country” and continent when EVs are mass produced, Pizzurro said. “The future is having gigaplants close to the automotive factories.”

Momentum to build a homegrown supply chain appears to be building. In December, Ontario-based First Cobalt Refinery, owner of the only permitted primary cobalt refinery in North America, received $10 million in federal and provincial funding to accelerate the recommissioning and expansion of its northern Ontario factory — a project worth $77 million.

Once completed, First Cobalt will be capable of producing 25,000 tonnes of battery-grade cobalt sulfate a year — roughly five per cent of the global market, the company said in a statement. But for Canada to become an EV battery hub, first it would need more EV assembly scale.

At the same time, the City of Windsor, Ont., is pursuing an unnamed battery producer to build a factory in that city.

Dean Stoneley, former CEO of Ford Canada, views Ford’s $1.8-billion investment in Oakville as an “anchor” for further EV production in Canada — but it’s only a start.

“Frankly, you probably need more scale than one manufacturing plant,” Stoneley said during a virtual conference held in November by the Automotive Parts Manufacturers’ Association (APMA). “So, I would welcome news from any of our competitors to move into this space.

“The more scale that we have here, the more opportunity this would provide to bring full manufacturing here. But that’s probably some ways off at this point.”

WAITING FOR EV OUTPUT

Automakers are investing billions of dollars into EV development, providing an opportunity for companies in the battery supply chain. General Motors, for instance, said it would spend US$27 billion ($34.6 billion) on EV and autonomous-vehicle development through 2025. Ford plans to spend US $22 billion ($27.9 billion) on electrification through 2025.

But today, no electric vehicles are built in Canada. Ford plans to start building EVs in Oakville by 2026, while Stellantis plans to spend up to $1.5 billion on its Windsor, Ont., plant to build battery-electric or plug-in hybrid vehicles, or both, on a new platform by 2024.

GM will spend $1 billion retooling its CAMI plant in Ingersoll to assemble EV delivery vans by November. Current plans are to import batteries from Ohio for an initial run of about 500 vans, said GM Canada President Scott Bell.

If the number of EV models built in Canada rises in the coming years, automakers and suppliers could face pressure to localize as much of the battery supply chain as possible.

As it currently stands, the transportation of batteries is costly and can take time because they are transported primarily by sea because of aircraft weight restrictions, said Klaus Drobnak, Magna Steyr’s vice-president in Asia.

Additionally, China produces a majority of the lithium hydroxide used for EV batteries, Drobnak said. That means the supply chain is heavily affected when problems occur there. The same is true for cobalt, most of which is mined in the Congo.

“Disruptions in the area can turn into bottlenecks for the entire supply chain,” Drobnak said during the APMA conference, “so this is always a risk that we have.”

MISSING INGREDIENTS

Battery assembly can be done in Canada now, but raw materials would have to be sourced from elsewhere for the time being, until the domestic mining industry builds capacity, said Frank So, executive vice-president of E-One Moli Energy Corp., a Taiwanese manufacturer of lithium-ion batteries with a Canadian division based in Maple Ridge, B.C., just outside of Vancouver.

Canada has the ability to eventually mine the materials for use in EVs, So said, though it would require determination throughout the entire supply chain.

“A lot of our mining resources are basically waiting for the demand to take off before there’s investment,” he said. “But at the same time, without the material available within North America, it makes it very difficult to just start up and manufacture because a lot of the materials are still coming from overseas.”

Developing the mining for battery production and assembly in Canada is doable, said

Brett Lynch, CEO of Sayona Mining Ltd., a lithium miner in Quebec and Australia.

It would require a concerted effort involving miners, refiners, automakers and suppliers to ensure that the industry’s specifications are met at every step along the way.

“This can all be done in Canada,” Lynch said, “and that is a unique advantage.”