Electric vehicles | Maximize the economic return of our critical minerals

This text is inspired by the opening speech at the “IFIP 20^th International Conference on Product Lifecycle Management” which takes place in Montreal from July 9 to 12

Catherine Beaudry

Professor and holder of the Canada Research Chair in Management and Economics of Innovation, Polytechnique Montréal

Norway has been able to build the largest sovereign wealth fund in the world with its oil revenues, thus transforming its natural resources into capital (whose interests and not capital are used to pay for groceries). Why wouldn’t we do the same with our critical minerals?

Unlike oil and gas which disappear in smoke (toxic) once used globally, critical minerals remain and thus offer a golden opportunity for multiple monetary gains to be seized.

Since the launch of Canada’s New Critical Minerals Strategy in December 2022, and the recent announcement of the Energy Transition Valley (third innovation zone), the time has come to explore new models of creation and value capture within the electric vehicle battery ecosystem.

Rooted in the principles of the circular economy, this strategy is based on five segments of the critical minerals value chain, including “advanced manufacturing and recycling”.

The use of electric vehicles is an important step between these last two segments. Both driving and charging practices and frequencies influence the useful life of the battery, for the vehicle in question and its second use.

Value chain

Developing a digital twin of the battery would make it possible to monitor its health in almost real time (during each recharge, for example).

We could thus optimize its operation, by suggesting the ideal time for the transition to a second life and the type of use to be encouraged: from electric bicycles to large-scale energy storage systems for buildings.

Floating in the billions, this strategy is otherwise silent on how to generate such advanced manufacturing revenues. The strategy advocates limiting the export of critical minerals and then re-importing them in the form of goods, which involves “building industrial ecosystems where all stages of the value chain are available and integrated in the country”, thus reducing production greenhouse gases related to their transport.

However, the small size of the Canadian market and the fact that we do not yet have sales quotas for electric vehicles undermine this desire for a large part of the value chain to remain in the country. Because that is what it is all about since we are also aiming to capture the value of critical minerals by increasing exports.

We must not delude ourselves. Once the battery of the electric vehicle is installed and exported, this battery will not return to us for a second use, its recycling and the reintegration of the minerals into the value chain. At all stages of the processing of these critical minerals, a significant portion leaves the country.

Let’s rent our batteries!

What if we rented the battery of the electric vehicle rather than selling it? After all, Michelin relies on the rental of its tires! Using our expertise in food traceability, we certainly have the capacity to set up a traceability and rental system for electric vehicle batteries.

To do this, an international standard for the manufacture and use of the electric vehicle battery should be created. For now, the technology is not yet sufficiently stabilized, and many big players are fighting hard for global dominance.

With its second place in the ranking of supply chains, Canada is in an excellent position.

To ensure that our technologies become the “dominant designs” (dominating design) internationally, our small businesses need support to navigate the regulatory system, even contribute to it, and impose themselves in the development of international standards. An ecosystem approach is necessary and this is where the Energy Transition Valley innovation zone comes into its own.

Since most Quebecers still have iron at “1 cent per tonne” in their throats, it is worth remembering that Quebec is still a dunce in terms of mining royalties.

Instead of selling off our critical minerals at ridiculous prices to large multinationals, why not rent them? That way, if advanced materials and electric vehicle batteries are exported, or recycled in another country, rental income could help pay for groceries. Traceability of batteries and critical minerals for leasing could, for example, leverage blockchain technologies.

Refusing to have its conduct dictated by the Meta and Alphabet, Canada, like a David, seems to have developed an appetite for battles against the Goliaths of this world. Why not continue this momentum and claim our due when it comes to critical minerals?