Canada’s Surge in the Global Electric Vehicle Market Led by Ontario
Canada, traditionally a leader in natural resources like oil, gas, gold, copper, and potash, has now become a significant player in the electric vehicle (EV) industry. BloombergNEF's annual global lithium-ion battery supply chain ranking saw Canada take the top spot for 2023, surpassing China. This achievement is attributed to advances in manufacturing, production, and strong environmental and social governance (ESG) credentials. Major companies such as Umicore, Volkswagen, Ford, Stellantis, and LG Energy Solutions have announced investments in Canada.
Ontario is at the forefront of this development. Premier Doug Ford and Prime Minister Justin Trudeau announced on May 14 that Japan's Asahi Kasei Corporation will invest about $1.6 billion to build an EV battery component plant in Port Colborne, Ontario. Construction will start in late 2024, with operations expected by 2027. This investment will receive support from Ontario and federal tax credits.
"Today's announcement is more good news for Ontario's world-leading electric vehicle manufacturing sector and the thousands of workers who are benefiting from the billions of investments being made in our province," Ford stated.
Ontario's role in the EV market is crucial, enhancing EV battery production and increasing market share and influence in North America. This diversification reduces reliance on China for the EV battery supply chain.
However, challenges remain. EVs are not yet cost-effective for average consumers, though hybrid models are becoming more accessible. The construction of EV charging stations across Canada will require significant taxpayer funding and real estate. Environmental concerns about the disposal of older EV batteries also persist. Rowan Atkinson, the British comedian and electrical engineering graduate, has criticized the environmental impact of lithium-ion batteries, highlighting their heavy weight and limited lifespan.
Ontario's economic development minister, Vic Fedeli, emphasized the province's growing significance in the EV sector. Over the past four years, Ontario has secured $43 billion in new auto and EV investments, more than any U.S. state during the same period. This includes Honda's $15 billion investment, the largest auto investment in Canadian history.
"When we took office, Ontario's auto sector had been steadily declining for years," Fedeli noted. "In 2019, Reuters reported that companies planned to spend $300 billion globally in the EV sector, but none of it was planned for Canada. Fast forward to today, and Ontario has now landed $43 billion in new EV investments in just four years."
Fedeli is committed to ensuring Ontario capitalizes on this economic opportunity by building out an end-to-end EV supply chain. With global demand for EVs increasing, Ontario aims to manufacture the vehicles and batteries of the future, adding tens of thousands of well-paying jobs.
"Ontario is perfectly positioned to be a global leader in EV production for decades to come," Fedeli concluded. This development is promising for Ontario, Canada, and the entire world.
