Industry Minister Champagne makes the case for EV investment at ‘right time’ for Canada

After wrapping up his latest international trade trip to Japan on July 8, having met with leaders from Honda, Nissan, Panasonic, Subaru and Toyota, the list of overseas automakers and battery companies with which François-Philippe Champagne has not recently shared a conference table is getting slim.

Canada’s minister of innovation, science and industry also pitched the country as an investment destination to BMW, LG Chem, Mercedes-Benz and Volkswagen on two separate tours through Europe this May.

Immediate results from the three trips were nil, but with “tectonic shifts” creating new fault lines in the sector, Champagne said the automakers gave him the sense that Canada is knocking on their doors at the “right time.”

“In a world where supply chains are going from global to regional, where there’s far more emphasis on resiliency than on pure efficiency, I think Canada is the only country in the Western world that has all the critical minerals to build batteries,” Champagne told reporters on a conference call from Tokyo on July 8.

How well that pitch resonates with the laundry list of companies Champagne met with will be measured in euro, yen, won and dollars over the next few years.

But after an eight-week stretch this spring that saw $13 billion invested in Canada’s assembly plants and its battery supply chain, additional spending looks a bit like running up the score for an industry that has long been starved of serious investment.

Automakers in Japan and Germany have taken notice of the “very solid” battery ecosystem taking shape in Canada, Champagne said. With investments already locked in for electric vehicle assembly, battery production and cathode active material plants, Champagne said Canada can now shift from establishing a place in North America’s battery ecosystem to optimizing its position.

“It doesn’t make much sense to mine in Africa, refine in Asia and build batteries at home,” Champagne said, pointing to Canada’s one-stop shop for every step in the EV production process.

Along with Canada’s mineral endowment, the industry minister’s soft sell hinges on the country’s clean electricity grid, which gets 82 per cent of its power from non-emitting sources, far outpacing grids in the United States and Mexico, its key auto competitors. In the short term, Champagne added, the global sector will go from focusing solely on EVs to emphasizing “green” vehicles that take into account the environmental footprints of resources used to build them.

While Champagne did not discount the possibility of a new Canadian assembly plant, he said the focus of the discussions in Japan was the battery ecosystem. He said the talks drilled down into “specific opportunities,” but did not share further details.

Automakers are typically tight-lipped about their production plans, but there are indications Canada is in the running for further investment, even from automakers without a current manufacturing presence.

In April, for instance, Volkswagen CEO for North America Scott Keogh visited Canada to scout opportunities. The company has not made any local announcements, but he said Canada is doing an “amazing job” positioning itself in the battery supply chain and nothing is “off the table.”

Keeping Canada top of mind for global automakers and battery firms is among the reasons Champagne said he continues to “make the case for Canada.” The minister said he will visit one other major auto and battery powerhouse in 2022. He plans to visit South Korea later this year.

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