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Full speed: GM’s BrightDrop will be Canada’s first large-scale EV operation


observes “very limited activity happening at any stage along the supply chain”. Mr Marshall says Canada lacks scaled production of all its battery minerals and that one of its newest nickel mines took 13 years to come online. Ontario is vying to attract a company that


will build a gigafactory, and hopes the arrival of EV production will help its bid, given automak- ers’ desire to avoid transporting heavy compo- nents. “We are presenting our location to a number of international battery companies that are looking to set up gigafactories some- where in North America,” Stephen MacKenzie, chief of Invest WindsorEssex, said in July. “We hope to have some announcements in the com- ingmonths.”Headded that the province is will- ing to offer incentives and that he has recom- mended all levels of government collectively cover 20–25%of the value of a battery project. The government has chipped in one-third of


Ford’sC$1.8bnEVinvestment, C$46.4m to accel- erate battery mineral processing, and C$10mto help First Cobalt open North America’s first cobalt refinery. But it is facing intense pressure to do more. Mr Marshall understands that one- quarter of the national C$8bn Net Zero Accelerator fund has been earmarked for an EV supply chain, but a government spokesperson has told fDi it is only open to firms incorporated in Canada. The proposed 50% corporate tax cut for businesses building zero-emission technolo- gies only benefits those turning a profit. CEC’s Joanna Kyriazis says “there is no com-


prehensive roadmap for … what investments will be made and where along the supply chains.” Lack of a coordinated strategy and pub- lic funding is in line with Canada’s hands-off approach to industrial policy. But the industry says to reach its EV potential, the government must step up its commitments. Pointing to the


August/September 2021 www.fDiIntelligence.com


US administration’s $174bn EV package, China’s state-backed industry and European state aid, Mr Volpe says: “We need to stop pre- tending that we all operate in a freemarket.”


America: friend or foe? Inextricably linked to Canada’s EV future is the US, whichbuys some70%of its vehicles, accord- ing to the Canadian Vehicle Manufacturers’ Association (CVMA). “The number-one reason for investment in Canada’s auto industry is because we sit right above the world’s wealthi- est economy,” says Brian Kingston, chief execu- tive officer of the CVMA. To qualify for duty-free sale under North


America’s USMCA trade pact, 75% of an EV’s batterymust be sourced from the continent.Mr Volpe notes that in a business operating under single-digit profit margins, a 2.5% tariff is not insignificant. The US’s push to cut China from tech supply chains is another plus for Canada’s batteryambitions. But Ms Kyriazis describes Canada’s relation-


ship with the US as “both collaborative and com- petitive”, noting that “Mr Biden has made very clear hewants tomake batteriesandEVs a centre- piece of his economic plan.”TheWhiteHouse has confirmed its willingness to rely on allies for bat- tery minerals. Insiders agree this risks Canada continuingitslonghistoryofexportingrawmate- rials without any added value, and makes refin- ing investments the lynchpin of itsEVsuccess. But Canada must move fast, otherwise it


could miss a once-in-a-generation opportunity to become a major player in an industry of tomorrow. The stakes could not be higher: “In 20 years fromnow, ifwe’ve done this right from a public–private partnership perspective, Ontario and Quebec will be the lead EV cluster in North America,” Mr Volpe says.■


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