Canada has overtaken China as the country with the world’s highest potential for a safe, reliable and sustainable lithium-ion battery supply chain in 2023, according to a global lithium-ion battery supply chain ranking released this month by Bloomberg New Energy Finance (BNEF).
The BNEF ranking, which covers 30 countries and considers 46 individual indicators, tracks supply chain potential across five equally weighted categories, including raw materials, battery manufacturing, downstream demand, ESG, and industry, infrastructure and innovation. The study found that Canada’s leadership in raw material resources, strong collaboration with the U.S. automotive industry, and clear policy commitments give Canada a competitive advantage.
Over the past few years, policy commitments by the Canadian government at the provincial and federal levels have attracted investment from battery manufacturers and related suppliers.BNEF highlights recent investments in Canada by large multinationals such as Ford, Stellantis, Volkswagen, LG Energy Solutions and Umicore.
This is the first time that China has lost its position as the world’s leading supply chain for lithium-ion batteries, and BNEF notes that while China’s supply chain remains the strongest, the sustainability of lithium-ion batteries throughout their life cycle is increasingly important. This means that China must take a more proactive approach to addressing ESG issues so that its supply chain can benefit in the long term.
Canada’s continued advancements in manufacturing and production, as well as its strong ESG (environmental, social responsibility and corporate governance) capabilities, provide the foundation for it to become a leader in the battery supply chain of the future. Furthermore, the country’s close alignment with the U.S. automotive industry has also made it a big winner of the U.S. Inflation Reduction Act.
The U.S. is the world’s second-largest market for electric vehicles, and since the U.S. is Canada’s largest trading partner, the U.S. automotive industry is a huge market for Canada’s lithium-ion battery industry.
BNEF describes Canada as a “big winner” from the U.S. Inflation Reduction Act, pointing out that the Act further strengthens Canada’s advantage over China by providing favourable tax treatment for North American-produced electric vehicles and restricting the use of key minerals and other critical components from countries such as China and Russia.
