Ontario wants to be a leader in the electric vehicle (EV) supply chain. Major hurdles have arisen, forcing manufacturers to backtrack, deferring or scrapping their plans. Premier Doug Ford’s initial enthusiasm for this vision has waned as recent developments signal a need for a strategic pivot towards battery storage technologies. This change is about keeping our industry afloat as the markets start to change. It simultaneously meets the growing worldwide demand for American-made electric vehicles.
The Ontario government is still fully invested in their plan of making the province a hub of the EV industry. That vision is running into some serious roadblocks at the moment. Recent moves by the big three automotive manufacturers underscore these headwinds. For instance, Asahi Kasei’s planned separator facility in the Niagara Region will proceed, despite its initial announcement being linked with Honda’s EV production plans, which have since been postponed. Meanwhile, Stellantis has altered its EV strategy with the “full understanding, blessing, and encouragement” of the Ontario government, indicating a willingness to adapt to the current market landscape.
Industry analyst Sam Fiorani, of AutoForecast Solutions, underscored that need as he emphasized the urgency to ramp up EV making capacity. He contends there won’t be major breakthroughs on that front for a minimum of five years. This feeling is a sign of a new understanding that we can’t pursue our immediate challenges without beginning to work toward our long-term vision. Ontario’s Economic Development Minister Vic Fedeli believes there is a $24 billion opportunity in battery storage. That reliability, he thinks, will be critical to maintaining the EV supply chain to power the world’s new electric vehicle production—challenge as it may be.
Ontario has big plans to create a MINERALS TO MANUFACTURING storage-battery INDUSTRIAL COMPLEX. These batteries are not only an important component of electric vehicles (EVs) but also stationary applications. Further, domestic production of components like separators will be essential in fostering the developing market. Umicore has suspended plans for a cathode plant in eastern Ontario. This fundamentally risky decision adds to the overall uncertainty that’s gripping the supply chain.
To compound these challenges, there is a new trade deal between Canada and China that deeply undercuts many of these barriers by significantly lowering tariffs on Chinese EVs. Many have worried the deal will severely impact Ontario’s automotive industry in particular. The increasing global demand for electric vehicles only heightens these concerns. Yet, a lack of clarity around federal rebates and EV sales targets in place across Canada limits regional demand.
If you’re eager to see electrification go further, faster, and cleaner, keep reading! By 2050, it could increase 75%, driven in part by the growth of the electric vehicle market. Stellantis’ response to EV sales that aren’t living up to the hype is to lean even harder on battery storage solutions as the plan B smart play. John Stackhouse, Senior Vice President of the Royal Bank of Canada, is a fierce proponent of this strategic pivot. He’s confident that demand for battery storage will remain robust, even with the current headwinds in the EV market.
“These are multi-billion dollar, multinational companies who’ve made choices on what to build, and the market has to be there for them.” – Vic Fedeli
Vic Fedeli remains optimistic about Ontario’s positioning in the global EV supply chain, emphasizing the province’s readiness to support companies in their endeavors. He stated, “If they want to build something, we’ll help them build it. If they create jobs, we’re agnostic to what they build. We just want the jobs.” This adaptable approach highlights the Government of Canada’s real commitment to creating the conditions for job creation and economic development across the province.
Even with these challenges, Fedeli wanted stakeholders to know that electric vehicle sales remain up year-over-year. “The electric vehicle sales are up every single year, year over year,” he affirmed. He expressed confidence in Ontario’s ability to attract investment and become a leading choice for companies within the EV supply chain.
Stellantis is doubling down on battery storage. Fedeli acknowledged that manufacturers will be seeking new models to recoup their investments in EV production. He remarked, “So much investment has been made in battery production, and the demand for EVs has not ramped up as quickly as … the manufacturers expected.” This feeling signals the importance of new, dynamic approaches to meet the landscape-changing circumstances in which our industry now operates.
“There could be a double win there for Ontario, both through battery storage and the eventual growth of EVs.” – John Stackhouse
According to John Stackhouse, sweetening the deal by diversifying Ontario’s auto manufacturing base would be worth the effort. For one, he emphasized that battery storage is not just a stopgap measure but a smart play ready for sustained advancement. Battery storage is a massive opportunity and I wouldn’t deem it an interim opportunity. It’s a geopolitical imperative too—that’s a strategic opportunity because there’s going to be more and more demand for those battery storage technologies and capabilities,” Stackhouse added.
