Fully charged: Why Canada is now #1 on the global EV battery supply chain
Electrification is an integral part of the decarbonization efforts necessary to combat climate change. And one of the most significant ways to achieve sustainable electrification is through the responsible development of lithium-ion batteries that power electric vehicles (EVs).
In February 2024, BloombergNEF (BNEF) revealed in its annual EV battery supply chain report that Canada had outperformed China to take top spot in the overall ranking. The BNEF report was inaugurated in 2020 and ranks 30 countries based on their potential to build a secure, reliable and sustainable lithium-ion battery supply chain.
BNEF (the NEF stands for New Energy Finance) considers five equally weighted categories to arrive at its overall ranking. Here are some of the key reasons why Canada rises above all others in building the kind of supply chain the world needs.
CANADA HAS AN ABUNDANCE OF CRITICAL RAW MATERIALS
In the BNEF report, the Raw Materials category measures a country’s reserves, mined supply and refined supply of key battery materials.
Canada stands out from global peers because of an abundance of raw materials, including critical minerals at a scale necessary to produce EV batteries.
A global mining powerhouse, Canada has extensive mining experience and renowned geoscience expertise to both identify mineral potential and maximize efficient development of resources.
Canada also has 50 smelters or refiners (SORs) whose high-quality output is integral to sustainable manufacturing. Benefits of battery-grade materials from Canada include shorter, traceable routes to markets.
CANADA HAS SEEN A FLURRY OF MASSIVE BATTERY MANUFACTURING INVESTMENTS
The BNEF report’s Battery Manufacturing category evaluates the scale of a country’s battery cell and component production and recycling capabilities.
Canada has made rapid strides in the global EV battery supply chain. Since 2022, some of the world’s largest companies have invested billions into the EV battery supply chain in Canada. Volkswagen-owned PowerCo of Germany, South Korea’s , Belgium’s Umicore and Sweden’s Northvolt are among the companies making investments. In addition to battery and mineral processing companies, global automakers such as Stellantis, GM and Ford have been making transformative investments in Canada.LG Energy Solution, Belgium’s Umicore and Sweden’s Northvolt are among the companies making investments. In addition to battery and mineral processing companies, global automakers such as Stellantis, GM and Ford have been making transformative investments in Canada.
Recognizing the long-term economic benefits of building a strong EV battery supply chain, governments at all levels in Canada – federal, provincial and municipal – have committed support to these kinds of investments. Canadians, in turn, see the immediate economic benefits of well-paying jobs from responsible corporate members of the community that help bring ongoing, sustainable prosperity.
Canada also supports a burgeoning lithium-ion battery recycling ecosystem, led by homegrown companies that include Li-Cycle and Lithion.
CANADA WILL CONTINUE TO SEE – AND MEET – INCREASED DOWNSTREAM DEMAND FOR EVS
The BNEF report’s Downstream Demand category assesses the demand for electric vehicles and energy storage within a country and its associated free-trade region.
As part of a commitment to decarbonize the transportation sector, Canada is taking measures to accelerate the adoption of zero-emission vehicles (ZEVs). ZEVs in Canada are enjoying steady growth of market share. Canada has made aggressive EV sales targets and has committed to achieve 100% ZEV sales by 2035 for all light-duty vehicles. To help support these ambitious targets, Canada is investing to make ZEVs more affordable and charging stations more accessible.
Demand in North America is also expected to grow dramatically through the U.S. Inflation Reduction Act (IRA) measures. Impacts from the IRA are expected to more than double EV sales by 2030, compared to pre-IRA forecasts.
CANADA HAS UNMATCHED ESG ADVANTAGES
The BNEF report’s Environmental, Social and Governance (ESG) category measures a country’s credentials in what is an increasingly important stakeholder consideration. Canada’s ESG performance is particularly impressive, especially given it is the only North American country to make the top 10 in the ESG category.
Key to Canada’s strength in ESG performance is the Towards Sustainable Mining (TSM) program. Introduced by the Mining Association of Canada in 2004, TSM is a world-leading initiative that ensures sustainability indicators are measured and improved upon.
Companies choosing Canada for investment – particularly those involved in energy transition – often cite Canada's clean electricity grid as a major reason to expand. Having access to an electricity system that is 83% non-emitting nationwide gives a battery company like Northvolt the opportunity to meet its stated goal of creating some of the world’s greenest batteries in Canada. And Canada’s high labour standards – plus a commitment to material traceability – gives companies additional means to achieve sustainable production.
What’s more, Canada has funds and incentives to foster clean growth, including investment tax credits. In fact, Canada has been identified by Rystad Energy as one of the top two countries in the world for green energy investment attractiveness.
INDUSTRY, INFRASTRUCTURE AND INNOVATION – THE WORLD’S EYES ARE ON CANADA
The BNEF report’s fifth and final consideration – the Industry, Infrastructure and Innovation (III) category – analyzes the quality of a country’s supporting sectors.
Canada is tightly integrated into the North American auto supply chain, which sees the free flow of components between Canada, the U.S. and Mexico. Canada’s free-trade access and firm commitment to EV adoption reflect vital support to the EV industry.
In terms of infrastructure, Canada has the lowest commercial electricity cost and strong road, rail and marine transportation infrastructure in its robust supply chain.
And Canada runs the gamut from exploration to recycling when it comes to innovation. Canada is a pioneer in innovative all-electric mining and also home to companies with modern facilities making some of the most sustainably produced EV batteries in the world – and operating within an ecosystem of state-of-the-art technologies to recycle these batteries.
ADDING EVERYTHING UP, CANADA’S #1 POSITION ON THE EV BATTERY SUPPLY CHAIN IS CLEAR
Raw materials remain the backbone of Canada’s EV battery supply chain. As well, strong integration with the huge U.S. automotive sector, recent advances in Canada’s manufacturing pipeline and well-established ESG credentials are helping give Canada a historic prominence on the EV battery supply chain.
Canada has recognized the importance of building a complete end-to-end EV battery supply chain. Transformative investments are creating well-paying jobs and bringing prosperity to communities throughout Canada. A commitment to sustainable investment in the EV battery supply chain in Canada is part of the transition to long-term sustainability for the planet.