For the first time, Canada has surpassed China to lead BloombergNEF’s annual ranking based on an analysis of 46 metrics in five categories
Canada has claimed the top spot among 30 countries in BloombergNEF’s latest global lithium-ion battery supply chain ranking.
The ranking, now in its fourth edition, looks at each country’s potential to build a secure, reliable and sustainable supply chain for lithium-ion batteries.
It evaluates that potential by analyzing 46 metrics across five categories: raw materials, battery manufacturing, downstream demand, environmental and social governance (ESG), and industry, infrastructure and innovation.
Canada was second behind China in last year’s ranking. Its ascent to the leading position in 2023 can be attributed to the country’s “consistent manufacturing and production advances, and strong ESG credentials,” writes BNEF in its summary of results.
“Canada has improved (or maintained) its performance in all five categories in the last two editions of the ranking,” says BNEF. “Companies such as Umicore, Volkswagen, Ford, Stellantis and LG Energy Solutions have recently made announcements to invest in the country.”
“Raw materials remain the backbone of the [Canada’s] supply chain,” says BNEF in its write up.
Canada retained its top three ranking in raw materials because of its existing mining and refining capacity as well as having a well-laid plan for capitalizing on its battery metals markets in the long term.
In battery manufacturing and downstream demand, Canada rose to 7th position, an improvement from last year’s 8th and 10th positions, respectively.
In 2023, Canada was the setting for major battery gigafactory announcements by Volkswagen and Northvolt. The federal government also committed up to $25 billion in incentives to these projects, underlining the country’s dedication to advancing in these areas.
The ranking also highlights the flourishing growth in downstream demand due to “the implementation of the country’s demand-side support levers and internal combustion engine phase-out targets.”
In terms of ESG criteria, Canada maintained its 6th position. It is the only North American country in the top 10. Canada also has the potential to move up in the ranking if it increases the federal carbon tax and focuses on better ecosystem management.
Lastly, in the category of industry, infrastructure and innovation, Canada moved up two spots to secure second place. This advancement is attributed to having the cheapest commercial electricity in the ranking.
However, BNEF underscores that to clinch top spot in this category, Canada must focus on strengthening its domestic infrastructure and innovation landscape and improve its performance across trade, policy and investment.
North America excelling
The BNEF ranking finds that North America, in general, is excelling in battery supply chain developet.
While Canada secured the top spot, the U.S. reached third place. Mexico climbed eight places to 19th.
“Clear policy direction and commitment in North America have been key to the region’s rising supply chain potential,” says the BNEF summary. “Strong integration with the US [sic] automotive sector means Canada is also a big winner of the ‘friendshoring’ ambitions of the Inflation Reduction Act.”
The ranking also identified some potential threats for Canada, noting that low battery metal prices could constrain the development of pipeline projects in the region. It emphasizes the need for more financial support to enhance project cost-competitiveness.