Waterloo EDC
The news of Stellantis and LG Energy Solutions partnering on a Canadian electric vehicle battery manufacturing facility was transformative for the automotive industry in Canada.
It’s a $4.1 billion investment – the biggest single automotive investment in Canadian history. It will have an annual production capacity of 45 gigawatt hours and will create 2,500 jobs. It’s a pillar for the foundation of Canada’s EV ecosystem, but it’s just the tip of the iceberg.
The Stellantis/LG investment is the latest announcement ensuring the Canadian automotive corridor will continue to thrive, while highlighting significant opportunities for American companies supporting Canada’s focused shift to building an EV supply chain.
Canadian EV investments in a nutshell
Let’s start with the automotive manufacturers.
First, the most award-winning automotive manufacturing plant in North America— Toyota’s Cambridge facility, located in Waterloo Region and just a couple of hours away from Detroit, Michigan, made a $1.4 billion investment paving the way for production of hybrid versions of the Toyota RAV4, the Lexus RX hybrid, and Lexus NX hybrid.
In late-2020, Ford announced a $1.8 billion investment to build five new battery electric vehicles in Canada. Fiat Chrysler announced a $1.5 billion investment to build electric vehicles likely using the batteries manufactured through the Stellantis/LG plant. GM invested $1 billion to transform one of its existing plants into a hub for producing electric commercial delivery vans and another $400 million for a battery plant. In each case, federal and provincial governments have stepped up to support the investments.
The Big Three – plus Toyota – are making massive investments in the last few years.
It doesn’t begin and end with batteries, though. North America has a shortage of nickel, cobalt, lithium for manufacturing batteries so US and Canadian governments have committed $3.8 billion to fund the development of the critical minerals industry. Waterloo is a massive untapped reserve of battery-making minerals in Northern Ontario.
A compact automotive ecosystem
If you’re from the United States, you might be forgiven for not having a perfect idea of Canada’s automotive geography. Here’s the headline: most of this new investment is happening within a 250-mile-long corridor.
The main Canadian manufacturing cluster is quite a bit larger – stretching from the base of Ontario into Quebec – but Canada’s most productive automotive corridor runs from Windsor, Ontario, to Oshawa, Ontario, a trip that takes about 3.5 hours on the 401 superhighway that connects them.
The manufacturing and automotive corridors overlap, and inside of them is the Toronto-Waterloo Corridor, which is North America’s second largest tech cluster. There is no other location in North America where a major automotive manufacturing ecosystem contains a major technology ecosystem.
This has led to a substantial amount of investment in new automotive technologies. Waterloo has more than 80+ autotech companies including Geotab, ESCRYPT, and OTTO Motors working on everything from electric vehicle analytics to automotive security to battery recycling.
Waterloo is right in the middle of each of the concentric circles on the map. In this mid-sized community of 600,000 we have those autotech companies and North America’s most award-winning automotive manufacturing facility, Toyota’s Cambridge facility has won 16 J.D. Power Awards. They’re also within an hour drive of major Honda, Ford, and General Motors manufacturing facilities. Everything is very close together, accessible for suppliers and tech innovators.
An opportunity for global automotive suppliers and innovators
The Canadian automotive corridor is exceptionally receptive to new EV and mobility investments, whether they’re from Canadian companies, American companies, or those further afield.
Canada is committed to growing its EV supply chain fast and the Canadian government is proving to be a willing investment partner. There are also gaps in mineral mining, refining and most importantly, processing, battery component manufacturing, refurbishing and recycling, and electric vehicle components, an opportunity for OEMs and suppliers looking to grow.
The United States-Mexico-Canada Agreement (USMCA) means most components produced here won’t face tariffs at the US-Canada border. This makes the Michigan automotive cluster a prime potential customer, only a few hours’ drive from Toronto and just across a river from Windsor. Other locations with major automotive manufacturing clusters such as Kentucky, Tennessee, Indiana are within a less than a day’s drive.
And it’s not just the United States, either. If you develop a product that has a global market, Canada has the world’s most comprehensive trade network, including agreements with the European Union, Japan, and the United Kingdom.
Lastly, our country is also fertile ground for companies looking to invest in research and development. Canada’s tax credit and grant programs are generous, and Canada has an excellent reservoir of automotive talent. The University of Waterloo, located in the middle of Canada’s automotive corridor, is home to Canada’s largest collection of automotive researchers and has deep experience helping manufacturers and suppliers develop new products to climb the value chain. Waterloo’s close to America’s automotive hotbeds so the transfer of information and expertise is seamless.
The global transition to electric vehicles is a once-in-a-generation happening, and for companies looking to grow, Canada has the best deal on the table.