As a speaker at the recent event focusing on building North America’s resilient EV battery supply chain, I had the opportunity to delve deep into emerging trends, challenges, and strategies shaping this critical sector. Here are the key takeaways and insights from the event:
1. Biggest Risks: The ‘Made in North America’ Strategy
- The North American battery market faces significant challenges in securing a reliable supply of raw materials due to the USA’s FEOC regulation in effect from 2025.
- The current overdependency on the Chinese supply chain for battery raw materials and components will lead to supply uncertainty.
- USA regulation is forcing the development of upstream and midstream capabilities that are not planned or operational until 2026.
- Digital identifiers/passports of supply chain materials bring transparency and security while promoting circularity and sustainability.
2. Enhancing Critical Mineral Mining Capacity within North America
- Boosting the mining capacity for critical minerals like lithium, nickel, and cobalt is crucial for supporting EV tax credits under IRA, thereby making low-cost EVs possible.
- This also ties deeply into ESG goals, ensuring that the extraction processes are environmentally friendly.
- Currently, there are no nickel and cobalt mining and refining facilities in North America that supply the EV battery industry, strongly challenged by costs and regulatory hurdles.
- Investments in recycling are increasing, helping to reduce dependency on raw material imports and support a circular economy.
3. Onshoring EV Supply Chain with Mineral Processing
- Developing the midstream segment for the battery material supply chain is crucial, as most refining and further production of battery materials are highly concentrated in China.
- China accounts for 65% of nickel and 82% of cobalt processing, while the country has only ~4% of nickel and 2% of cobalt mining. China also accounts for 72% of cathode and anode production, creating competitive pressure for North American players to enter the market.
- Nickel and cobalt refinery projects are underway in Canada and the USA, with a common plan for battery recycling as the next phase.
- Refining challenges in recycling: Currently, black mass from battery recycling is shipped to Asia for refining, as no strong regulation is in place.
4. Leveraging Canada: Resources and Government Support
- Canada holds abundant natural resources of battery materials like lithium, nickel, cobalt, graphite, phosphate, etc.
- Six ongoing projects by various companies for CAM/PCAM manufacturing facilities within Ontario and Quebec are scheduled to be operational by 2025-2026.
- Canada’s infrastructure facilitates advanced and sustainable manufacturing (e.g., Canada is one of the world leaders in the production and use of energy from renewable resources).
- Canada has a 100% zero-emission vehicle sales target by 2035.
- Canada’s programs, like Critical Mineral Research, Development and Demonstration (CMRDD), fund manufacturing facilities, and ACCA helps write off capital costs of machinery.
- Province-level funding, such as Quebec’s Plan for Development of Critical and Strategic Minerals (QP DCSM), is also available.
Conclusion
The event highlighted the multifaceted challenges and innovative strategies required to build a strong EV battery supply chain within North America. From leveraging government incentives to sustainable infrastructure, Canada stood as a promising premise for a holistic approach. The insights and discussions emphasized the importance of local production and sustainable practices in driving the future of the EV battery industry. As one of the speakers, it was encouraging to see the collective effort and commitment towards overcoming these challenges and securing a resilient supply chain for the future.
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