Electric vehicle batteries could add $48 billion annually to the Canadian economy

The report recommends Canada “double down in a few key stages” of the electric car battery supply chain in the near term, such as assembly of electric vehicles, manufacturing of battery cells, and production of clean battery materials.

Canada’s electric car battery supply chain could add $48.2 billion annually to the country’s economy and support as many as 250,000 jobs by 2030, according to a new report calling for a comprehensive government strategy that extends from mineral exploration to battery recycling.

Canada’s Clean Energy and Advanced Manufacturing Trillium Network point to a “thriving” battery market, citing the International Energy Agency’s call for electric vehicles to capture 35 percent of the global car market in 2030, up from nine percent in 2021.

“The Canadian Electric Vehicle Battery Supply Chain isn’t just a pretty idea. It’s a very big and very real economic opportunity with potential winners across Canada and across industries.

According to Bloomberg NEF, Canada ranks fifth globally in terms of battery supply potential, after China, the United States, Germany and Sweden.

The annual GDP contribution of $48.2 billion is the report’s most ambitious scenario. It takes nearly all of Canada’s auto assembly capacity to focus on electric vehicles. New mines and new investments in battery materials, cathode production and recycling will be needed.

Canada will also have to attract another major facility, a small battery cell facility. The country landed its first massive battery factory in March, when automaker Stellantis and South Korean battery giant LG Energy Solution announced plans to invest $5 billion to open a new electric car battery factory in Windsor, Ont.

Furthermore, sales of light vehicles must reach a 90 percent emission-free target by 2030, with the United States meeting its 50 percent target. Additionally, sales of medium and heavy-duty vehicles should be 35 percent and 23 percent in Canada and the United States, respectively.

“While this may seem like a difficult task, it is not unrealistic,” the report’s authors wrote. “The choices Canada makes over the next seven years will determine the outcome we achieve.”

In July, Prime Minister Justin Trudeau said Canada was making a “big bet” of becoming a major player in the global electric vehicle supply chain. His comments came on the heels of news that Belgian mineral refiner Umicor is set to build a $1.5 billion facility near Kingston, Ont.

Two weeks later, Canada scored a major victory when US lawmakers allowed electric vehicles made in Canada to qualify for a consumer tax credit. The original bill, a key part of US President Joe Biden’s climate agenda, previously restricted credits for vehicles produced by US union automakers.

The report recommends Canada “doubling down on a few key stages” of the battery supply chain in the near term, such as assembly of electric vehicles, manufacturing of battery cells, and production of clean battery materials.

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 all provided important metallurgical strategies focused on electric vehicle battery metals.

If no further government action is taken, the report concludes that Canada’s battery supply chain will create 60,000 jobs by 2030, and contribute $12 billion annually to the country’s GDP.

Jeff Lagerquist is a Senior Reporter at Yahoo Finance Canada. Follow him on Twitter Tweet embed.

Download the Yahoo Finance app available for apple And the Android.

Leave a Comment