1704296068 2023 the year of billions for the battery industry

2023, the year of billions for the battery industry

More than ten years after the government's first action plans to electrify transport, Quebec's battery sector finally took shape this year, with a lot of public funding.

• Also read: Strong criticism of our shift towards the electric battery sector

• Also read: Property sold to Northvolt for $240 million: “It’s like winning at Loto-Québec”

• Also read: More than $43.6 billion in public funding for battery manufacturing

“Thanks to its significant hydroelectric resources, Quebec can attract companies in new industries of environmentally friendly technologies such as electric vehicles,” said an action plan presented in 2011 by the government of Jean Charest.

The idea was taken up two years later by the Marois government and then by François Legault's Caquists.

After years of promises and waiting, the first shovels of earth were made this year.

GM, Ford, Northvolt…

In May, the joint venture between General Motors and Korea's POSCO got the ball rolling by confirming an investment of more than $600 million to build a cathode active materials plant in Bécancour. Quebec and Ottawa contribute almost half the amount.

In August, Ford and its Korean partners EcoProBM and SK On committed to also building a cathode materials factory, still in Bécancour. Planned investment: $1.2 billion, including $644 million in loans from Quebec and Ottawa.

Then, in October, came the main course: Swedish startup Northvolt's mega-project for a $7 billion battery cell assembly plant in Montérégie. The result: government aid of more than $2.7 billion for plant construction and $4.6 billion for manufacturing activities.

There were also the projects of Vale (nickel sulfate plant), Air Liquide (low-carbon gas) and TES Canada (green hydrogen).

46% of projects are financed by the state

According to the Legault government, nearly $11 billion in projects “related to the battery sector” have been announced so far. Of this, 54% is invested by the private sector, with the rest coming from Quebec (28%) and Ottawa (18%).

“It’s definitely a lot of money in the short term [public]“But it is an investment that will pay off very well in the medium term,” says Daniel Breton, CEO of Electric Mobility Canada and a former PQ minister. He points out that buying fossil fuels in Quebec costs more than $1 billion a month.

Note that projects related to the battery sector accounted for more than two-thirds of the blocks, with a total capacity of 956 megawatts of electricity, approved in August by the Minister of Economy and Energy Pierre Fitzgibbon.

If we take into account the presence of companies such as Lion (electric vehicles), Flo (charging stations), Blue Solutions (batteries) and Lithion (battery recycling), Mr. Breton believes that Quebec is now well positioned in the field of transport electrification.

Delay for critical minerals

“We have good fundamentals,” he said. The critical mineral sector needs to be developed here. It has started, but we are behind again.”

The North American lithium mine at Abitibi reported its first revenue this year – about $85 million – since being restarted by Australia's Sayona and America's Piedmont.

It remains to build the bridge between the minerals extracted from our soil and battery production in Quebec. Currently, lithium and graphite processing plant projects do not have the necessary funds to move forward.

Yan Cimon, professor of strategy at Laval University, also points out that the future factories of Northvolt, Ford and GM will have to fight for their place in a highly competitive global market.

“We can be pleased with the victories we have achieved this year, but this is certainly not the time to rest on our laurels,” he warns.

Five notable moments of 2023

A $131 million computer


Photo provided by IBM

In September, IBM put one of the world's most powerful quantum computers into operation at its Bromont factory. Its computing power will make it possible to advance the research and development projects of researchers and companies in Quebec. The $130.5 million project benefited from $68 million in support from the Legault government.

Still millions

Investissement Québec (IQ) and the Ministry of the Economy (MEIE) have invested more than $75 million in five private investment funds this year. Since 2014, IQ and MEIE have invested around $1.5 billion in around thirty private funds. As Le Journal revealed in July, the government refuses to disclose which companies these funds have invested taxpayer money in – a situation denounced by governance experts.

Quebec invests in a company sold to Americans

In early December, Minister Pierre Fitzgibbon announced $58.3 million in “support” for H2O Innovation as part of the sale of a majority stake in the Quebec company to the American group Ember for $395 million. Part of the $28.5 million in government aid was paid into the Quebec Business Growth Fund, whose mission is to… protect headquarters.

Tough year for electrification

Three Quebec players in transport electrification have had a difficult year. At the end of November, bus and truck manufacturer Lion announced the layoffs of 150 employees, just months after receiving loans from IQ, the FTQ fund and Fondaction. Then, in mid-December, charging station manufacturer Flo laid off around forty workers despite support from Quebec and Ottawa. Finally, in March, IQ participated in the rescue of snowmobile and electric watercraft maker Taiga by providing about $15 million.

Davie showered him with public money


Minister Pierre Fitzgibbon during the announcement of $519 million in aid to Davie in April. Photo Stevens LeBlanc

In 2023, the Davie shipyard managed to receive public funding twice. In April, the Ministry of Economy awarded the Lévis company more than $519 million in aid to modernize its facilities. Then in November, Quebec announced an additional $110 million investment in Davie to enable the acquisition of a shipyard in Helsinki, Finland.

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