In 2022, the Government of Canada announced that At least 20% of all new passenger vehicles sold in Canada will be ZEVs by 2026, and at least 60% by 2030, on the road to 100 percent by 2035. Battery production is a critical factor in the success of electric vehicles, and Ontario is well-positioned to become a leader in this area.
The Ontario car manufacturing industry has long been a significant part of the province’s economy. However, it faces challenges in competition from other jurisdictions and a shift towards electric vehicles. But, business opportunities exist for those who can adapt to these changes.
EV Manufacturing Trends
There are currently almost 20 million electric passenger vehicles on the road, 1.3 million commercial EVs, and some 280 million electric mopeds, scooters, motorcycles and three-wheelers. EVs of all types are already displacing 1.5 million barrels per day of oil usage, equivalent to about 3% of total road fuel demand.
While these numbers look great, Canada is behind China, Europe, and the US on adoption, but there are many ways the government is incentivizing customers to make the switch. While there are many government incentives to improve the market, many regulations focus on helping niche consumers, not making the technologies, charging points, and price point of the Battery Electric Vehicles (BEVs) not accessible to the average consumer.
Governments across the globe are taking a “carrot and stick” approach to encourage the adoption of electric vehicles. Incentives like tax breaks are offered to those who purchase electric vehicles. In Germany, for example, the government grants a maximum of €9,000 and tax reductions for fully electric passenger vehicles.
In the US, qualifying plug-in electric vehicles (PEVs) receive up to $7,500 in tax credits. California also announced a $3.9 billion package, funding 1,000 zero-emission cars, 1,000 school buses, and 1,000 public transit buses.
In Canada the Incentives for Zero-Emission Vehicles (iZEV) Program. Plug-in Hybrid EVs (PHEVs) with an electric range of 50 km or more will be eligible for $5,000, and those under this threshold will continue to be eligible for $2,500. As a result of this change, as of April 25, 2022, some PHEVs are now eligible for up to $5,000.
If there’s a carrot, there’s also bound to be a stick. This comes in the form of policies and regulations. And yes, people can only meet them by buying electric vehicles.
Electric Vehicle Manufacturing Opportunities
Battery production is a critical part of the electric vehicle supply chain. To meet the demand for electric vehicles, companies need a reliable source of batteries. Moreover, the batteries must be of high quality.
The type of battery used in an EV depends on the range and performance required. The most common types of batteries are lead-acid, nickel-metal hydride (NiMH), and lithium-ion (Li-ion). Most new EVs feature lithium-ion batteries.
Battery production involves rare and critical minerals like cobalt, lithium, and nickel. The sourcing of these minerals is challenging as they are not found in high concentrations in any one country.
Canada is ranked 4th in the world for battery production potential, due to our plethora of natural resources. Currently, the Battery Manufacturing industry in Canada is $177.2m in 2022 measured by revenue. Because of the location of resources and our large mining industry, Ontario is perfectly poised to transition its auto-manufacturing industry to BEVs and PHEVs.
EV Supply Chain Opportunities for Start-Ups
According to the latest EY Mobility Consumer Index (MCI), the number of people looking to buy EVs globally has hit 52%. Bloomberg also reported that the global electric vehicle market is forecasted to reach 20.6 million in 2025. The demand for batteries is expected to increase as the number of EVs on the road grows. This presents an opportunity for start-ups and small businesses to enter the EV market!
There are so many opportunities for start-ups looking to get into the EV industry. The glaringly obvious one is the battery, battery tech, and clean mining. Any start-ups looking for global expansion in these industries should consider setting up a headquarter here in North America to take advantage of the plethora of government grants and incentives available for the industry.
Charging solutions and infrastructure has been long on the governments’ mind, and as more consumers buy EVs they will need home charging stations. Some malls, grocery stores, and parking garages are putting in charging stations, but many more will be needed to encourage a tipping point of adoption for the industry. Alternatively, start-ups can provide services to EV owners, such as maintenance or data analytics.
Expanding your Start-up into North America
The EV market is snowballing and presents many opportunities for start-ups and small businesses. Your business can get a piece of the EV pie! Canada is beautifully positioned between the US and European travel corridors and has trade agreements with 140 countries.
Our business incubator is located in the bustling city of Brampton, halfway along the Ontario Innovation Corridor. And there are already major EV manufacturers moving to the area!
Want to see if your start-up is ready for international growth? Book a call today.