Ontario: A smart choice for electric vehicle and battery manufacturing

Greg Da Re, Regional Director, Ontario & Nanami Akimoto, Strategy & Research Analyst, Invest in Canada

automotive manufacturing assembly line

Around the world, extreme weather disasters are on the rise, many of which are believed to be influenced by climate change. Never before have the effects of a gradually warming planet received so much attention. Fortunately, governments, companies and consumers around the world are taking meaningful steps against climate change.

In Canada, the government has released a blueprint to surpass its current 2030 GHG emission reduction target and to transition the country to a net-zero future by 2050. With the government helping pave the road to a clean-growth economy, investors are poised to benefit from the opportunities it is creating, and nowhere is this more evident than in sustainable mobility solutions.

Automakers have taken note of this shift and are now racing to build electric vehicles (EV), zero-emission vehicles (ZEV) and connected and autonomous vehicles (CAV) to meet increasing demand. The International Energy Agency forecasts that by 2030, stock of electric vehicles will reach 245 million, an exponential increase from only 7.2 million in 2019 – an expected annual average growth of 36%.

The Government of Canada has also committed to inviting investment in this industry by unveiling its strengthened climate plan. The plan includes a new Net Zero Accelerator with $3 billion of funding over five years. This funding will support the development and adoption of cleantech solutions and will seek to develop an end-to-end battery supply chain in Canada.

The province of Ontario is well-positioned to be the epicentre of the next generation of mobility solutions. As the Regional Director for Ontario at Invest in Canada, I frequently speak to global companies about the strength of Ontario’s automotive ecosystem. While many investors are already familiar with our storied past, they are often excited to learn about the pace and scale of transformation currently taking place and the many opportunities for foreign direct investment.

Ontario’s strength as a hub for automotive and advanced manufacturing

Along the 500-mile (800 km) corridor that stretches from Windsor to Ottawa, and only a short drive from one of the world’s largest markets, lies the richest concentration of automotive-related resources anywhere in the world. Ontario is also the only place in North America where five original equipment manufacturers (OEMs) build vehicles and it ranks second only to Michigan for North American vehicle production.

Ontario is thus home to an ecosystem of world-leading vehicle assemblers, parts manufacturers, tool, die and mould makers, and research centres that have been meeting the needs of international customers for more than 100 years.

Canada’s Next Generation Manufacturing (NGEN) Supercluster is also headquartered in Ontario.  It works to position Canadian companies to lead industrial digitalization by focusing on next-generation manufacturing capabilities such as advanced robotics, additive manufacturing and IoT.

Because of these strengths, OEMs continue to invest in Ontario.  Over the last few months, Ford, Fiat Chrysler Automobiles (FCA), and most recently, General Motors, have all announced significant reinvestments in Ontario with the first two committing to producing electric vehicles for the first time in Canada. Ford has agreed to build five EVs at its Oakville factory, starting in 2025 and FCA will invest in its Windsor assembly plant to build plug-in hybrid and battery electric vehicles, with at least one new model in 2025.

Leadership in Connected and Autonomous Vehicle development

The future of intelligent mobility solutions is already being built in Ontario today. More than 250 companies in Ontario are now actively involved in CAV development, and global OEMs are taking notice of the existing technology and testing facilities available, with expertise in artificial intelligence, connectivity, cybersecurity, and quantum computing.

Ontario’s Autonomous Vehicle Innovation Network (AVIN) is at the forefront of this mobility transformation. AVIN works to foster the commercialization of Ontario-made advanced automotive technologies, and drive innovation and collaboration among the growing network of stakeholders at the convergence of automotive and technology. Together with Automotive Parts Manufacturers Association (APMA), it operates the AVIN Technology Demonstration Zone in Stratford, Ontario where companies with CAV technologies can test, validate, and showcase them in a controlled environment. 

Ottawa’s Area X.O is another example which leverages the national capital region’s decades of telecom and cybersecurity expertise to accelerate the development and commercialization of disruptive technologies in a fully integrated vehicle-to-everything (V2X) environment.

Multiple advanced automotive research labs such as McMaster’s Automotive Resource Centre (MARC) and the University of Waterloo’s Autonomous Vehicle Research and Intelligence Lab (AVRIL), give Ontario an existing major advantage in designing the cars of the future.

Abundant natural resources for battery manufacturing

Leadership in the rapidly evolving electric vehicle industry will also create an opportunity for battery development and manufacturing. Here too, Ontario is positioned to play a significant role. Canada is the only nation in the western hemisphere with an abundance of cobalt, graphite, lithium and nickel, the primary minerals needed to make the lithium-ion electric batteries that all EVs use today. Many of those reserves are in Ontario and the neighbouring province of Quebec.

Tapping into Canada’s resources would eliminate the current massive global movement of these raw materials to Japan, China, and South Korea. These countries have no large mineral deposits of their own, but they have well-developed manufacturing capacity for batteries. The availability of minerals within Canada and its existing manufacturing infrastructure and expertise create enormous opportunity to develop an end-to-end value chain for battery materials and become a world leader in EV battery manufacturing.

Rigorous environmental standards and sustainable mining practices will help Canada to not only lead the transition to EVs, but also produce them and their materials sustainably, helping to advance progress towards achieving the goal of net-zero emissions by the year 2050.

The right talent for the challenges of tomorrow

Talent is the new currency, whether in the form of people, start-ups, or universities.  Ontario’s skilled workforce is a major selling point for companies looking to design and create next generation vehicles. Today, Ontario counts over 100,000 people working directly in the automotive sector.  Supporting this incredible ecosystem is a network of 24 colleges and 11 universities offering auto-related research initiatives and training programs in cities such as Toronto, Waterloo, and Ottawa, all recognized as some of the top tech hubs in North America.

Ontario benefits from Canada’s position of the highest educated workforce in the world, with 59.4% of the population aged 25 to 64 having a tertiary degree. This share rises to 64% in Ontario. The province also produces nearly 55,000 STEM (Science, Technology, Engineering, and Mathematics) graduates annually; more than any other province.

Ontario produces talent with expertise specifically in EVs. The University of Toronto’s Electric Vehicle Research Centre (UTEV) is conducting cutting-edge research together with industry partners on battery management and power electronics prototype development.

APMA’s initiative to build an all-Canadian zero-emission concept vehicle is more evidence of the talent in Ontario’s workforce. Targeting a release date in 2022, Project Arrow will be designed, engineered and built by our world-class automotive supply sector and post-secondary institutions.

Ontario’s attractive business environment

Ontario is a great place to make great things.  It already makes some of the best-selling cars on the road and continues to be recognized for a commitment to quality.

Ontario has a deep well of advanced manufacturing know-how and skilled talent for EVs and CAVs. More than a century of building automobiles combines with an equally impressive technology ecosystem of start-ups and academic centres of excellence doing world-class automotive research and development.  Add in an abundance of many of the critical minerals needed for battery manufacturing and you have one of the best places on the planet to build the EVs and CAVs of tomorrow.

If you’re a global company looking to expand in Canada or explore Ontario’s EV and CAV advantage further, contact us now.