Quebec’s perpetual positive charge in the EV supply chain

A flood of investments in the battery supply chain — from miners, battery-material suppliers and automakers — began gushing into Quebec in early 2022 and there are few signs the tide will recede.

Pierre Fitzgibbon, Quebec’s minister of economy, innovation and energy, said he was not surprised when the province’s mix of critical minerals and clean power began attracting the auto industry. But how quickly the investments began materializing caught him off-guard, he told Automotive News Canada.

“I underestimated the speed at which the parties wanted to conclude transactions,” Fitzgibbon said.

On March 4, 2022, Germany-based chemical giant BASF announced that it had purchased land for a cathode-active-materials plant in Bécancour, midway between Montreal and Quebec City. A week later, General Motors and Posco Chemical Co. shared joint plans to do the same.

That was just the beginning.

Bécancour is on deck to host more than half a dozen mineral processing plants of various sizes, becoming a somewhat unlikely hub for the province’s battery ecosystem.

Investments in lithium, graphite and other critical-mineral mines in more remote areas of Quebec were made through 2022 as well, with others expected as miners shift to development from exploration.

In early February, Nemaska Lithium has purchased a site and begun clearing land in Bécancour, Que., for construction of what could become Canada’s first processing plant capable of producing battery-grade lithium for electric vehicles.

And in later in February, battery materials company EcoPro BM formed a pair of Canadian subsidiaries amid talks with the federal and Quebec governments about financial backing for a prospective cathode active materials (CAM) plant in the province.

The string of battery supply-chain projects already announced in the province represents about $5 billion and Fitzgibbon thinks that figure could double in the coming years. He recently discussed the province’s battery supply chain and automotive outlook with Automotive News Canada. Responses have been edited for clarity and length.

QUEBEC NOTCHED SEVERAL BIG BATTERY SUPPLY-CHAIN WINS IN 2022. WHAT REASONS ARE COMPANIES GIVING?

Energy is one. We do have an edge because we have green, renewable energy. Many other places do not have green, even if they’re low-carbon.

Talent is very, very important as well, and we’re no different than anywhere else. We chase for talent. But in Quebec, given the focus we have on the battery file, people do get comfortable. I met [in January] with Posco. They are concerned about staffing but are very happy with the discussions with Quebec universities and colleges they’ve had. They want to get people in their plants, and that’s a worldwide phenomenon.

Cost of operations is another. Relatively speaking to the United States, Quebec is low cost.

BATTERY-CELL MANUFACTURING IS ONE PART OF THE SUPPLY CHAIN THAT QUEBEC IS MISSING SO FAR. ARE YOU HOPEFUL THE PROVINCE WILL LAND A PLANT?

The first cohort of cell plants has been announced close to the OEMs. It’s a natural reflex to want this production as close to the assembly plant as possible.

But at one point, integration makes more sense. We are solidifying the production of cathodes and anodes in Quebec. This is 50 per cent of the value of a battery pack, so we are at the right place to get that foundation built to take advantage of the second wave of cell plants.

We’re talking with two companies that want to build cell manufacturing plants. We have none signed; they may not be signed short term, but I’m confident that we will at one point get one.

QUEBEC IS RELATIVELY FAR FROM CURRENT AUTO HUBS. HAS THIS BEEN A DETERRENT IN LANDING A CELL PLANT?

The first wave, I would say that it was.

Now that we’re building this foundation from the ground up, meaning the mines and recycling, I think there’s more attention from companies. “Quebec is there. Let’s not forget Quebec.” During the second wave, I think any negative will disappear.

It took 50 years to build Quebec’s aerospace sector. We were nowhere on the battery supply chain in 2019. Three years later, I think we’ve made great progress.

THERE HAS ALREADY BEEN A LOT OF ACTIVITY IN BÉCANCOUR. IS THERE SPACE FOR FURTHER BATTERY SUPPLY-CHAIN INVESTORS?

The space is there. If you [Google] Bécancour, you’re going to see there’s a lot of areas around it. Obviously, we need to be cautious of the agricultural lands. There’s a lot of fertile land and we want to make sure we respect the environment, but there are some places we can build.

The issue becomes labour. We have to be cautious. I want to be rigorous that we don’t overpromise and underdeliver.

QUEBEC IS HOME TO SEVERAL COMMERCIAL-VEHICLE MAKERS. COULD THE PROVINCE BREAK INTO CONSUMER VEHICLES?

We are looking at commercial- and niche-market vehicles at this point, with manufacturers such as Lion Electric, Nova Bus and Taiga Motors.

Right now, there’s no aspiration to build [for example] a BMW plant in Quebec. But you know, we’re building from the base.

I think we’re better off with what we’re doing right now on the battery supply chain. We’re building a foundation. Will we one day make cars in Quebec? I don’t know, but we have to be realistic and focused. Because if you try to do too many things, you drop stuff.