Canadian EV Battery Industry Could Hit $48B Per Year

Canada has all the right components to cash in on an electric vehicle battery industry worth C$48 billion per year, but only if governments take ambitious action now to help the sector meet its potential, concludes a new report issued this week.

“If Canada plays its cards right, it has the potential to build a domestic EV battery supply chain that could support up to 250,000 jobs by 2030 and add C$48 billion to the Canadian economy annually,” write Clean Energy Canada (CEC) and Ontario’s non-profit Trillium Network for Advanced Manufacturing, in a summary of their new report. But without additional government support, their projections show those numbers dropping to 60,000 jobs and C$12 billion in annual GDP.

Batteries are poised to become “the engines of the global economy” as technology advances and climate change prompts a clean energy transition, the report says. But there is additional incentive to act fast now—since the United States’ EV policy veered away from subsidizing only American-made cars and instead “takes account of the integrated nature of North American automotive manufacturing,” writes CBC News business columnist Don Pittis.

“With the introduction of the U.S.’s new EV tax credit—requiring that a proportion of EV battery parts are sourced from North America and battery minerals are sourced from U.S. allies—Canada has a huge and guaranteed market right next door,” the report states.

Canada already has an established auto manufacturing sector that can be tapped for expertise and facilities, including assembly plants, work force, and research and development capacity. It is also “the only democratically governed nation in the world that has all of the minerals necessary to support a comprehensive EV supply chain,” Trillium Network Managing Director Brendan Sweeney told CBC.

An EV battery industry would connect Canada’s already established mining and automotive sectors, as well as other needed industries like battery recycling—expanding the country’s economy with batteries as high-quality end products.

“The key vision of the plan outlined in the report is that Canada would not just become a source of supply of raw materials for export to China, Germany, or a factory in Arizona, but an entire industry,” Pittis writes.

The report lays out nine stages of an EV battery supply chain to meet demand in North America: from with mining minerals, to producing materials, manufacturing components, assembling EVs, and ending with recycling batteries.

“While Canada could do it all, a more effective strategy would double down on a few key stages where the opportunity is greatest,” the report states. Critical opportunities lie in EV assembly, battery cell manufacturing, and “integrated battery material manufacturing,” where “Canadian minerals are mined, processed, and recycled in proximity to one another, making the supply chain more efficient.”

To pull it all together, Canada’s lawmakers need to develop a national battery strategy and take bold regulatory and legislative actions like establishing new mines, investing in battery research and development, and pushing towards targets for sales of light-duty zero-emission EVs, the report states.

But some parts of that vision are raising flags about the risks and impacts of a rush into battery supply chains. “A strong and coherent push to electrification, including EVs, is absolutely necessary and requires massive public investment, but it cannot be allowed to happen without integrating energy justice, economic justice, and environmental justice,” said Mining Watch Canada Co-Manager Jamie Kneen.

“Those principles mean improving the conditions of mining, including the right to say ‘no’ for affected communities, and reducing demand by the wealthy so that the poor can have access to the energy and resources they need to live dignified lives,” he told The Energy Mix in an email.

Kneen said the new strategy document missed the “immense and unsustainable” costs to communities and ecosystems if battery industry development “fails to account for the very real impact of mining and processing the minerals needed to support not just conversion to EVs, but ever-increasing numbers of private vehicles.” Those risks could be addressed, he added, with a plan that mandated better conditions for mining and mapped out a reduction in future demand for private mobility.

Methods do exist to properly assess the impacts of major industrial development, he added. “Unfortunately, I can’t think of anywhere this is being done in a useful way.”

CEC Clean Energy Program Manager Evan Pivnick said the report reflected a commitment to sustainable mining processes, including Indigenous consent, “best-in-the-world” sustainable practices, and accelerated electrification of mining sites.

“We also very intentionally highlight the role of battery recycling in this research, as that is a critical way to minimize the amount of mining required long-term,” he said in an email, citing Toronto battery recycling start-up Li-Cycle as a company “that can recover up to 95% of the valuable materials at the end of the battery life.”

That line of thought echoed a recent analysis by Rocky Mountain Institute co-founder Amory Lovins that pointed to battery efficiencies as the key to averting destructive mining practices. “Recycled lithium battery cells are about 17 times richer sources of nickel, four to five of lithium, and 10 of cobalt than their respective natural ores,” Lovins wrote.

“We know EVs aren’t a silver bullet solution to climate change, and reducing dependence on personal vehicles will be a key part of the mix,” Pivnick said. “But EVs are still a necessary part of the solution.”

Experts outside Canada are also eyeing battery supply chains as a critical foundation for more widespread EV adoption, with some pointing out that the transition hinges on sectors beyond mineral processing and battery manufacturing. Sectors supplying materials like concrete, steel, and roofing materials to build infrastructure for the supply chain, and for charging and driving the vehicles, will also need robust support, writes Utility Dive.

There could be growing pains at the start of the transition that can “bedevil electrification efforts,” said Robert Galyen, formerly chief technology officer at CATL, the world’s largest battery manufacturer. Issues can include governments developing incentives and regulations without fully understanding the sector.

“There are problems with understanding how complex this industry really is,” Galyen said. “It’s all about chemistry. It’s all about industrialization. And it’s all about bringing value to the shareholders.”