Despite possessing all the necessary components for lithium-ion batteries, Canadians lack access to EV cell and component manufacturing: nickel, cobalt, lithium, and graphite.
Canada also only has approximately 10% of the U.S.’s battery demand. Without government backing for battery supply chains, it seemed as though Canadian raw materials would lose their value-added when shipped to nations that had made investments in battery manufacturing.
Nearly half of the world’s lithium output will be produced in Australia by 2020, but most will be refined in China. More than 75% of the world’s battery material refining capacity is located in China, although China imports most of its raw materials (nickel, cobalt, and lithium) from outside.
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The significance of Australia’s raw resources is starting to be recognized. The first batch of lithium hydroxide from Tianqi’s new refinery in Western Australia, Kwinana, was produced in August. BHP Billiton began operating its Nickel West facility in Western Australia earlier this month, manufacturing nickel sulfate, a critical battery raw ingredient. With no significant battery demand and no local car manufacturing, Australia is unlikely to attract many players in the supply chain. Here is where the tales of Canada and Australia divide. In Canada, battery demand is acceptable due to the country’s current car manufacturing and the USMCA free trade deal, which allows Canadian batteries to be supplied to the US EV supply chain.
While Canada can be a crucial player in the North American battery supply chain until recently, it seemed that the government and policymakers were unwilling to support efforts to bring in this sector. Two cell manufacturers have been persuaded to set up business in Canada in the past two weeks, with plans to construct gigawatt-hour scale cell production facilities in the nation, not anymore.
To meet the growing need for renewable energy, Britishvolt intends to construct a 60GWh facility in Quebec. Canadian start-up company Stromvolt plans to build a 10GWh facility in Ontario. North America expects to add more than 400GWh of new generating capacity over the next decade based on these and other developments. These plans still fall short of the region’s projected 2030 demand of 508GWh per year, so additional projects will likely be announced shortly. Suppliers prefer to relocate closer to their customers once a nation has cell production capacity. The rest of the component manufacturing sector will then follow. While battery environmental consciousness is rising in Europe, it is not yet a top priority in North America, making Canada’s low grid emissions even more appealing as a manufacturing center for automakers.
North America’s electric vehicle (EV) market continues to develop at the same time a new supply chain super-hub emerges to threaten China’s supremacy and rapidly catch up with the expanding European sector.