We’re in the transition to the electric age, we better step it up

TORONTO—It’s one of the biggest industrial challenges Canada has faced: this is the transition to the electric age in mobility, with the movement of people and goods—cars and trucks, buses, railways, aircraft and ships—shifting at a fast pace to electric batteries and away from oil. Billions of dollars of public and private capital will have to be invested. The minerals needed for batteries will have to be found and new processing facilities making these minerals battery-ready built; technology will have to accelerate to improve the efficiency and lower the costs of batteries; building a Canadian capacity to participate in battery value chains to supply specialized parts and components; investments in technology and production facilities to scale up Canadian companies will be critical; the charging infrastructure for electric mobility will have to be put in place. We will need top research and engineering talent and skilled workers if the industry is to succeed. And the electric grid itself will have to expand significantly. The opportunity is there. And some positive things are happening. But where is our overall plan? Boasting that Canada will be a world leader is not a plan. Where do we see our best chances? And what must we do? We must build Canada’s industrial potential in the electric vehicle revolution with a sense of urgency. Globally, this is a US$3-trillion industry. Countries around the world are competing fiercely to benefit. Canada’s challenge is to win a share of this industrial transformation, but it won’t be easy. Some countries started earlier and many are spending vast amounts of money. We have few Canadian scaled-up companies that are ready to lead. So to be among the winners, we will need scaled-up Canadian companies that have the proprietary technology for success in the North American and global marketplace. Minerals are a good example of our challenges. In a Canadian Global Affairs Institute study, Brendan Marshall notes that while Canada has the potential to supply key minerals for batteries—nickel, cobalt, lithium, graphite, and manganese— much more investment is needed. “Possessing battery minerals and materials,” he stresses, “does not equate to having value-added battery-grade materials. To create battery-grade materials, a specified value-added manufacturing stage and process are required for nickel, cobalt, magnesium, graphite and lithium.” For example, nickel must be transformed into nickel sulfate, cobalt into cobalt sulfate, manganese into manganese sulfate, graphite into ultra-high-purity spherical graphite and lithium into lithium carbonate and lithium hydroxide. But “while Canada has a strong foundation of battery minerals and metals, and downstream smelting and refining capacity for nickel and cobalt, it does not produce battery-grade nickel, cobalt, manganese, graphite or lithium,” Marshall says. Canada must also ensure its battery materials are cost competitive; it will not be the only source of supply. Who will finance and own the mines to produce raw materials and processing capacity to convert minerals into battery-grade materials? Canadian companies? Or will Canada provide just the raw materials while high-value processing is done in the U.S.? Oil companies could find new roles by investing profits in the electric revolution. But instead, Canadian oil companies are using profits to boost share prices, spending billions of dollars to buy back shares, not investing in future electric revolution opportunities. Cenovus Energy Inc., a leading Alberta oils sands producer, plans to buy back 146.5 million of its shares. Suncor is doing the same. What about the batteries? There are three major stages in electric vehicle battery production: the manufacture of cells, the assembly of modules, and the production of battery packs. While three auto companies, Ford, Stellantis (formerly Fiat-Chrysler) and General Motors, are planning to spend just over $4-billion to retool plants in Canada to make electric vehicles (with the federal and Ontario governments expected to provide about $1-billion of that), there is no indication any will source batteries in Canada. The most significant move into battery production—and the greatest success so far in Canadian electric vehicles—has come from Quebec-based school bus and commercial trucks manufacturer Lion Electric. It recently announced a plan to build a $285-million battery manufacturing plant and innovation centre, with $100-million from the federal and Quebec governments. It will produce both battery modules and battery packs in a highly automated facility, relying on LG Chem, BMW, and Romeo Power for its cells. The company has a proprietary battery thermal management system which is a critical part of a battery’s efficiency. Other Canadian companies are attempting to get into battery production. Stromvolt Americas, an Ontario start-up, is currently seeking to raise $250-million—including contributions from the federal and Quebec governments—to build a battery cell factory in Quebec, based on licensed technology from Delta Electronics in Taiwan. It would serve various commercial markets, such as fork lift trucks, and, based on this success, hope to build a future plant in Ontario for the automotive industry. Other companies are also pursuing the battery market. For example, Martinrea International, one of Canada’s largest auto parts manufacturers, has teamed up with a Montreal-based graphene producer, NanoXplore, to create a joint venture, VoltaXplore, to pursue graphene-based, rather than lithium-based, batteries. Dana Corp. and Quebec Hydro have formed a joint venture, Dana TM4, to pursue battery research. At the same time, Tesla is looking to Canada for technology. It has formed a partnership at Dalhousie University which gives it ownership of the intellectual property created by Canada’s leading battery research institute. It acquired Hiber Systems, which designs and builds advanced manufacturing technology for batteries in 2019 and recently announced plans for a new manufacturing facility in Ontario to make equipment for its U.S. battery plants. It also acquired a small Ontario company, Springpower International Inc., for its intellectual property, technology that significantly reduces water consumption in battery plants. But this means we are producing intellectual property for others. There is Canadian potential to succeed in the electric revolution. The problem is, as Clean Energy Canada, an industry body, says, “Canada is still very much in starting territory” while others are moving ahead. Clearly, we need to do much more to build a Canadian industry. Failure will make us poorer. David Crane can be reached at crane@interlog.com. The Hill Times

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We’re in the transition to the electric age, we better step it up

We will need top research and engineering talent and skilled workers if the industry is to succeed. And the electric grid itself will have to expand significantly.

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