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Canada positioned to thrive in EV landscape-and other takeaways from EV/VE 2022
October 10, 2022
Authored by RSM Canada LLP
Edwin P. Reilly, CPA, CA shared this article
REAL ECONOMY BLOG | October 10, 2022
Electric mobility is no longer the future—it’s the present. That was one of the key messages at EV/VE 2022, Electric Mobility Canada’s conference in Toronto last month. The national not-for-profit organization’s event drew electric vehicle sector stakeholders including federal and municipal governments, automotive suppliers and manufacturers, EV charger producers, utilities, nonprofits and researchers.
Recent sales numbers bear that message out. Last year, there were 6.6 million EV passenger vehicles sold worldwide—more than double the 3.2 million the year before. By 2040, the projected sales of EVs globally will be 65 million per year, according to Bloomberg.
Another prominent message was that Canada has what it takes not only to fulfill its goal of transitioning to EVs domestically but also to become a supply powerhouse for critical EV and battery materials throughout North America.
Canada’s EV mandate sets a target for 100% of the country’s new light-duty vehicles to be zero-emission by 2035, which is consistent with the global shift toward carbon neutrality. While more and more Canadians are adopting EVs, sales of such vehicles in Canada are lagging the levels reached in leading jurisdictions. Only 6.6% of cars sold in Canada in 2021 were electric vehicles.
The EV adoption in other markets is happening at much larger scale and speed. For instance, Germany and France—two major European car markets—achieved the 20% EV adoption mark last year. Apart from being spurred by regulatory requirements, the growing demand for EVs is driven by societal readiness and support of the transition.
When it comes to further embracing electric mobility, Canada has significant competitive advantages and market opportunities. Those include:
- Critical mineral wealth—Canada ranks in the top five countries for battery materials supply chain, possessing all key minerals for battery production such as lithium, graphite, cobalt, nickel, manganese, aluminum and copper
- A mature manufacturing infrastructure and leading supply chain firms
- A highly skilled workforce, though the EV sector faces the same labor challenges as the rest of the economy
- Leading scientific and applied research in minerals and battery innovation, from wireless EV chargers to next-gen batteries and breakthroughs in extending the lifecycle of materials and battery recycling
- A clean battery advantage—Canada is a world leader in the production and use of renewable energy. Hydropower generates more than 50% percent of Canada’s electricity, providing low-carbon energy and allowing it to produce the world’s cleanest and most sustainable batteries
- Proximity to and a free trade agreement with the United States, making Canada a country of choice for U.S. battery and automakers qualifying for U.S. credits and incentives.
At the conference, speakers highlighted Canada’s mineral wealth and emphasized the importance of streamlining regulations, permitting processes and access to financing. With demand for critical minerals expected to grow exponentially and significant capital investments and long lead times to operationalize new mining (7-10 years), the existing shortage of critical minerals is expected to worsen, putting EV adoption targets at risk.
Despite many headwinds in the way of mass adoption of EVs, the needle is moving and there are plenty of opportunities for market players. A successful transition will require organizations to have a clear roadmap and collaboration across the entire value chain. Companies will also need to prioritize recruiting employees who can enable EV growth. On a national level, EV growth will also depend on Canada building out accessible and efficient charging infrastructure and upgrading the electricity grid to sustain increased electricity consumption.
The rise of EVs is creating a new sector of the economy, with significant potential for sectors including automotive and manufacturing, mining, technology, utilities, construction and infrastructure, transportation and logistics.
With the rapidly growing EV market, evolving technologies, significant government support and public buy-in, the opportunities for middle market players are significant. Companies should act now to seize on them.
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This article was written by Irina Im and originally appeared on 2022-10-10 RSM Canada, and is available online at https://realeconomy.rsmus.com/canada-positioned-to-thrive-in-ev-landscape-and-other-takeaways-from-ev-ve-2022/.
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