The Quebec battery sector in the eye of car manufacturers

For the “first time in a long time”, Quebec, thanks to its battery industry, is back on the radar of automakers, says federal Minister of Innovation, Science and Industry, François-Philippe Champagne. At the same time, industry players are calling on governments to keep their foot on the accelerator to avoid being overtaken in the electrification race.

Julien Arsenault
The Press

This interest from the automobile giants indicated by Minister Champagne does not mean the return of a factory to Quebec soil. Rather, it is an opportunity to increase ties between Quebec and Ontario – which is home to the assembly lines of General Motors, Ford and Toyota in the country.

“I talk to them (builders) every week,” he said on Monday during a round table organized by the Chamber of Commerce of Metropolitan Montreal (CCMM). This is the first time in a long time that we have seen these major manufacturers, even European ones (take an interest) in what is being done in Quebec. »

The battery sector was at the heart of the event, which brought together representatives of Quebec players in the sector, such as the Lion Electric Company, Nouveau Monde Graphite, Stromvolt, Recyclage Lithion. Mr. Champagne took part in it along with his colleague responsible for the Economic Development Agency Pascale St-Onge and the Quebec Minister of Economy and Innovation Pierre Fitzgibbon.

Quebec lost its last auto assembly plant almost two decades ago when General Motors (GM) closed its doors in Boisbriand in August 2002. Hyundai shut down its Bromont facility in 1994 .

In terms of electrification, Quebec specializes in commercial vehicles, such as buses, heavy trucks and ambulances. At the same time, two start-up companies, Britishvolt and Stromvolt, have ambitions to build battery factories in the province.

It is here that car manufacturers, looking for a stable supply of these critical parts for the assembly of electrics, could get involved. They could, for example, support battery manufacturers. Quebec would become a source of supply for its neighbor Ontario.

“What I particularly like […] it’s to see how Quebec and Ontario can fit together in what I call the vehicle of the future,” said Mr. Champagne.

As part of its strategy, the Legault government predicted, last October, that total investments – private and public – would be around 8 to 10 billion over a few years.

Rivals and Challenges

With its hydroelectricity and its subsoil that is full of minerals such as nickel, lithium, graphite and cobalt, Quebec has many assets to carve out a place for itself in the electrification niche. But the competition is intensifying.

In the United States, battery factory projects are confirmed in addition to being supported by the automotive giant. An example: GM announced last week that it wanted to spend up to 7 billion US in Michigan, in particular to build a battery factory there.

“The market needs everyone to work faster,” said Benoit Couture, president of Recyclage Lithion. The challenge is to keep up. We are barely ready for our commercialization and everywhere in the world, we would like us to be serving the markets. »

Financing and access to capital to grow is therefore a challenge for businesses in the Quebec cluster. Added to this is the challenge of finding qualified labour. Quebec has identified the Bécancour industrial and port park as a development hub for its electrical sector.

Companies such as Nouveau Monde Graphite and Nemaska ​​Lithium are located there. The place should also host the Britishvolt battery factory if it sees the light of day.

“When we’re going to need 250 employees each or a cell manufacturer needs 5,000 […] we have difficulty recruiting 10 people in Bécancour, launched the president and CEO of Nouveau Monde Graphite, Eric Desaulniers. We will have to find creative solutions. »

Another element could put a brake on the electricity sector: the protectionism of the Biden administration. Washington offers a tax credit of up to US$12,500 for the purchase of zero-emission vehicles built on US soil. In a context of “regionalization” of supply chains, Mr. Champagne said he was confident of “finding a solution with our American partners”.