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Canada to help boost U.S. electric vehicle industry by supplying minerals
Toyota Motor is very conservative when it comes to the expansion of electric vehicles. The American authorities also realize that without sufficient volumes of raw materials and components, it will not be possible to organize the assembly of electric vehicles in the country in the required quantities, so they are going to turn to their northern neighbor for minerals for the production of traction batteries.
Image source: Reuters
As Reuters notes, citing knowledgeable sources, yesterday the US Department of Commerce held a closed virtual meeting, which discussed the use of Canada’s raw materials base to develop traction battery production in the region. We are not talking about the provision of government subsidies yet, but the supply of a certain list of minerals and components for electric vehicles is no longer subject to customs duties when imported into the United States.
The mining industry accounts for 5% of Canada’s gross domestic product, while in the United States its share does not exceed 0.9%. Despite all efforts to ensure environmental protection during the extraction of minerals necessary for the production of batteries, such an activity in the United States would cause concern for environmentalists, therefore, contacting Canadian suppliers is also aimed at protecting the «native nature». There is also a certain logistical nuance: lithium batteries are not so safe to transport over long distances, so their production facilities should be located close to car assembly lines. The southern Canadian provinces of Ontario and Quebec are optimal from this point of view for supplying batteries to the states of Michigan and Ohio in the north of the country.
The mineral reserves in the United States, which will be in demand with a sharp increase in the production of electric vehicles, may not be enough to supply the home industry, so Canada must become a reliable supplier of both raw materials and finished components. The top officials of both states are already negotiating in this direction, and American companies have increased investments in the mining industry in Canada.