Much of the discussion around zero-emission vehicle (ZEV) policy in Canada focuses on building demand, including incentivizing and even compelling Canadians to switch to electric and other non-emitting vehicles.
We agree that driving up demand for ZEVs is crucial to the transition toward sustainable mobility, but it is the supply side of the ZEV equation that promises to bring long-term, tangible benefits to the Canadian economy.
It is time we evolve ZEV policy to focus on building our supply chain – specifically industrial plans that position Canada to capture as much value as possible from the global shift to zero-emission mobility, including through the sustainable extraction and processing of critical minerals, the development of battery materials and technologies, and the manufacturing and assembly of electric vehicles and their components.
In a new report released by Accelerate, Canada’s ZEV industrial alliance, the CEOs and the most senior executives from 20 companies across the broad Canadian supply chain discuss what could constitute a successful ZEV industry for this country and we recommend four steps to achieve this goal.
Federal and provincial governments have already shown they appreciate the size of the economic opportunity represented by a full ZEV supply chain.
By pursuing and supporting global companies to establish factories for producing electric vehicle batteries in Canada, they have conveyed an understanding that our vehicle industry can leverage and expand out from our parts and assembly sectors.
By releasing its critical minerals strategy last year, the federal government demonstrated it understands how our natural resources can contribute significantly to this evolving industry.
Strengthening Canada’s position
These are foundational pieces, but much more needs to be done to secure Canada’s place in the global ZEV industry.
Specifically, we need to define what success looks like for Canada in zero-emission mobility, then start developing the industrial plans, actions and performance measurements that will support upstream mining, midstream processing, battery materials production and, in turn, link these with downstream battery, component and vehicle production
These industrial plans need to be informed by all stakeholders, including critically the growing Canadian firms and the large global companies allocating capital, innovating, taking risks and building the connective fibres across this ecosystem.
We and our fellow business leaders involved in the Accelerate report are optimistic about the potential for Canada to build a competitive industry, thanks to abundant natural resources, clean energy and decades of manufacturing expertise.
We are also enthusiastic about the potential of emerging technologies being developed in Canada, including in anode and cathode processing, battery recycling and material recovery, and other battery innovations.
The obstacles and solutions that lie ahead
But we are also concerned about the current lack of public and capital markets investment in certain pivotal segments of the supply chain, including mid-stream processing; the slow deployment of charging infrastructure; lagging timelines for critical mineral mines; and the need for more technical know-how within the ZEV supply chain labour force.
To help frame an integrative industrial policy discussion aimed at building a thriving ZEV sector, the business leaders who contributed to the report, Seizing Canada’s Opportunity: Defining and Building a Successful ZEV Industry, outline four areas of concentration for Canada:
1. Because we are uniquely positioned globally to be relevant in many parts of the ZEV industry, significant public investment should be distributed across the entire supply chain, including mid-stream sectors that can process and refine Canadian natural resources instead of having them simply leave the country as raw material.
2. Canada is best-positioned if it views the opportunity before it as one primarily focused on North America, given the existing critical mass of vehicle production within the USMCA free trade region and a growing consensus that the EV sector’s heavy reliance on China represents a significant source of both geopolitical and supply chain risk.
3. What gets measured gets done. Key performance indicators are critical to establishing an industrial plan and to understand if Canada is achieving what it sets out to do. Such KPIs could include setting targets for Canadian-sourced inputs into North American-produced ZEVs, production-related greenhouse gas reductions, or jobs created by the broad mining-to-mobility ZEV industry.
4. A ZEV industrial policy for Canada should drive production and propel Canadian innovation primarily focused on scaling new technologies that can make the production of ZEVs and their constituent components more sustainable and thus suited to their promise of reducing global emissions.
Driving ZEV demand is essential, but because we are uniquely positioned to do so, Canada must also boost supply to help meet that demand. Working together across segments and sectors, we can develop winning ZEV industrial strategies to position zero-emission mobility as a critical part of our country’s industrial future.