Canada on its way to becoming a powerhouse in automotive electrification

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Canada on its way to becoming a powerhouse in automotive electrification

At least 10 companies have announced billions of dollars in investments in Canada to build electric vehicles.

When federal Innovation Minister François-Philippe Champagne takes the speak on the microphone to talk about the electrification of the Canadian auto industry, he has a favorite phrase to sum up his efforts to attract global investment: “It's not everyone in the world that wakes up thinking of Canada. His job, he says, is to change that.

I never stop, the 52-year-old former lawyer and business development strategist said in an interview. He says he is quite persistent.

Since taking over the Innovation portfolio in January 2021, at least 10 different companies have announced investments totaling $15.7 billion in Canada to build electric vehicles and manufacture the batteries that power them, even to extract the minerals and produce the materials that go into making these batteries.

His perseverance led him to make around the world championing Canada with some of the biggest tech and automotive companies: Volkswagen, Mercedes-Benz, Mitsubishi, Suzuki, Panasonic, Hitachi and Subaru, to name a few. Some, like Honda and Toyota, are already producing in Canada, but most are not present here.

Mr. Champagne argued that Canada needs to be more entrepreneurial if it believes it can attract new business.

No one on his team remembers the last time Canada had discussions with German automakers at the senior management level, he said. He first opened that door with the CEO of Volkswagen Canada Group, which oversees its dealerships.

“Then we had the CEO of the Volkswagen Group, which produces around 30 million cars every day, who spent two days with me, and now we text each other. »

— François-Philippe Champagne, Federal Minister for Innovation

In August, when Prime Minister Justin Trudeau hosted German Chancellor Olaf Scholz for a state visit, Volkswagen and Mercedes-Benz both signed agreements with Canada to explore the possibility of creating partnerships in the supply chain of electric vehicles.

It's quite amazing that in a matter of months we've gone from a mostly very limited relationship, outside of Canada's dealerships, to the highest level with the signatures of the German Chancellor, the Prime Minister of Canada , myself and [Volkswagen President] Herbert Diess.

Mr. Champagne touted the Canadian electric vehicle industry in Germany in May, Japan in July and Detroit in September. In November, he has appointments planned in South Korea.

A few weeks ago, he flew to Fremont, California to visit the Tesla factory. Rumors of Tesla expanding into Canada are rife and Mr. Champagne remains cautious, saying only to stay tuned.

Clean Energy Canada's Head of Programs, Evan Pivnick, believes the country has come an incredible journey in building its electric vehicle and battery supply chain over the past year.

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“I think […] we're way ahead of what most people in the industry would have predicted we were capable of achieving.

— Evan Pivnick, Clean Energy Canada

However, Mr. Pivnick pointed out that there is still a long way to go if Canada is to remain competitive in becoming a power in this area.

His firm recently released an analysis that indicates that with announcements made over the past two years, this industry will support between 60,000 and 110,000 direct and indirect jobs and contribute $12 billion to $19 billion to the economy. #x27;national economy by 2030.

Mr. Pivnick said if Canada plays its cards right, those numbers could reach 250,000 jobs and $48 billion in GDP.

This will require a comprehensive battery strategy, prompting Canadian automakers to convert nearly all of their assembly facilities to produce electric cars, open new mines and invest heavily in materials for to batteries, in cathode production and in recycling.

Rapid expansion of electricity supply is needed to power everything with clean energy, given that one of Canada's biggest selling points abroad is the abundance of clean energy here.

Mr. Pivnick said it also requires a workforce transition plan, something the Liberals have been promising for years but have yet to deliver.

“We need to start working on worker transition now so that the auto worker from ;today be tomorrow an electric vehicle assembly worker.

—Evan Pivnick, Clean Energy Canada

All auto plants in Canada are in the midst of a retooling process to produce electric vehicles, although none have promised a conversion complete. Several mining projects, whether greenfield or expanding, are already underway or under discussion. At least four battery material factories are under construction.

In March, LG Energy Solution and Stellantis announced a five billion dollar investment to build Canada's first gigafactory, a term coined by the firm Tesla to describe large-scale battery production factories. .

Mr. Pivnick estimates that Canada could need at least one more large factory and two or three smaller factories by 2030. The country must also increase domestic demand for electric vehicles and hopes that the United States may do the same.

Most people think of southern Ontario when they think of the Canadian auto industry, but geographic expansion is underway. Two of the battery materials plants under construction are in Bécancour, a small town of 12,000 inhabitants halfway between Montreal and Quebec.

In July, the Belgian company Umicore announced a $1.5 billion investment to build a materials production plant just outside of Kingston, Ontario.

Minister Champagne said the electric vehicle supply chain is a golden opportunity for Canada and that the consequences could be disastrous for workers if we do not seize this opportunity.

According to him, the world has taken note of the success of the past two years, but Mr. Champagne believes the best is yet to come.

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