General Motors Canada’s David Paterson tells Electric Autonomy Canada exclusively what GM’s new facility in Bécancour Industrial Park, slated to begin operation in 2025, will mean for the company and for Canada’s EV battery supply chain

General Motors Canada and Korea-based Posco Chemicals have chosen Bécancour Industrial Park in Quebec, near Trois Rivières, as the site of a new $500-million cathode active material (CAM) factory.

The announcement of the facility, which will operate as a joint venture, confirms industry suspicions kindled late last year that the legacy original equipment manufacturer (OEM) would be establishing a key part of its battery supply chain in Canada. Construction on the factory will begin immediately, says GM, and provide 200 jobs when the factory opens in early 2025.

“We looked at a bunch of different sites in North America, and across the board, Bécancour really came out first in attractiveness”, says David Paterson, vice-president of corporate and environmental affairs at GM Canada in an exclusive interview with Electric Autonomy Canada.

Paterson cites Quebec’s low-cost, “zero-GHG hydroelectricity,” high environmental standards, and educated workforce, as well as the location’s logistical advantages, including a deepwater port and easy rail access to the rest of North America, as factors in the decision.

Today’s official unveiling featured remarks from Scott Bell, GM Canada’s president, as well as François-Philippe Champagne, federal minister of innovation, science and industry, and Pierre Fitzgibbon, Quebec’s minister of economy and innovation.

“Today’s announcements just wouldn’t have been possible without the considerable work and effort of both Minister Champagne and Minister Fitzgibbon who both share our vision to build an EV value chain here in North American,” said Bell. “Put simply, cathode active material is a critical link in the supply chain that stretches all the way from mining to mobility.”

“This is a home run,” added Champagne. “This is not just big news for GM and Posco. It’s big news for Canada, big news for Quebec and big news for Bécancour.”

Important link in Ultium battery supply chain

As Bell noted, the CAM facility fills an important link in GM’s plans to build its own integrated North American EV battery supply chain — essential if it is to make good on its ambitious promises to convert its entire line of vehicles to all-electric by 2035. To help get there, it has said it will invest $35 billion by the end of 2025 to have capacity to produce one million EVs per year at that time in North America.

In 2020, GM unveiled its Ultium battery platform, which will power the company’s EVs. In step, it started investing heavily in its domestic battery-making capabilities, announced plans to build four Ultium manufacturing factories around the United States. The first, in Ohio, is coming online this year. Two others, in Tennessee and Michigan, will follow, while the fourth location has yet to be announced. The cathode material produced in Quebec will be sent from Canada to supply these factories in the United States.

The Bécancour facility is GM’s first new bricks-and-mortar EV battery supply chain investment in Canada. GM has already announced plans to convert its existing CAMI facility in Ingersoll, Ont., to produce the company’s electric BrightDrop delivery vans, starting in the fourth quarter of this year. In addition, it also has a research facility for Ultium battery development in Markham, Ont.

While Paterson confirmed in a press briefing that the location of GM’s fourth Ultium battery plant will be in the U.S., he also suggested that there may be opportunities for a battery cell factory in Canada sometime in the future.

Elaborating in our one-on-one interview afterwards, Paterson says that at some point GM will need more battery factories beyond the four currently announced.

“If you follow through the volumes of electric vehicles we intend to produce, the four [battery factories] that we’ve got are pretty well geographically distributed, but that’s not going to be the end of the transition. There’s going to be other pieces to fill in,” he says.

“You’ve got [the Brightdrop] plant that’s in Canada. We can service it with our Ultium factories, but let’s see, watch this space.”

Cathodes in Canada are key

As early as mid-2021 Electric Autonomy Canada was reporting on Canada’s EV battery supply chain in a six-part series studying the various segments and challenges faced at each stage. Paterson was a speaker on one of the panels.

Following the series, Electric Autonomy began reporting on GM’s increased activities in North America as a signal that it could be preparing to move battery production into Canada, and Quebec specifically — a province in which it’s had a long history but where it stopped manufacturing cars almost two decades ago.

In an exclusive interview last year, GM’s Bell told Electric Autonomy that “there’s a place for Canada for sure” in the car maker’s supply chain.

Around that interview, signals that Quebec was preparing to be a major site for EV battery supply chain innovation began to appear. Ontario-based StromVolt announced it was looking to secure battery cell manufacturing in the Bécancour area in October, U.K.-based Britishvolt followed with its own announcement about finding a “strategic location” in Quebec for their first Canadian facilities that it has not yet confirmed, while German-based chemical company BASF revealed last week it will be establishing its own CAM facilities in the industrial park to supply unspecified OEM partners.

“It will be a village there,” says Paterson. “We know our neighbours already. We were aware of BASF being interested in one of the parcels there, and there are some others that are down there, too. And that can be advantageous as you look for ways to mutually support the infrastructure.”

Electric Autonomy closely followed developments at all three levels of government in Ontario and Quebec and spoke with dozens of industry experts about the importance of Canada developing its national EV battery supply chain and the specific importance of securing cathode, anode and battery cell manufacturing facilities in order to participate fully in the EV market.

The consensus among those experts is that it’s also a benefit to OEMs to consolidate their supply chains locally. In GM’s case, cathode material accounts for roughly 40 per cent of the cost of each EV battery.

Asked if having this plant will help it reduce costs, Paterson suggests cost reductions are more a function of overall R&D. He says GM’s strategy of developing its own integrated EV battery supply chain enables the company to “own our chemistry.” That ownership, in turn, lends itself to advancements in R&D and potential cost savings.

“What GM will do throughout that supply chain is look for opportunities to continue to make those advances and bring down costs,” says Paterson.

Advocacy efforts paying off

The other important takeaway from GM’s announcement, as well as that last week by BASF, is that it indicates that federal and provincial advocacy efforts are finally paying off. Officials and stakeholders have been conducting hard-fought campaigns to court industry interest and secure investment in clean technologies and manufacturing in Canada.

Recent world events ranging from the COVID-19 pandemic to Russia’s invasion of Ukraine have underscored the importance of securing a North American EV battery supply chain.

“We’ve been all shocked and horrified by the image we have seen coming out of Ukraine,” says Champagne, going on to discuss skyrocketing oil prices that have some gas-vehicle drivers paying nearly $2 per litre at the pumps. In addition there are impacts on the larger supply chain as routes and resources are disrupted by conflict in key corridors.

Canada is viewed as a global safe haven for manufacturing. In addition to the stable political climate there is high government interest to incentivize companies to establish themselves in Canada while an abundance of clean electricity and access to the entire North American market means OEMs and EV battery makers stand to net a lot of benefits.

“We have the talent, we have the ambition and we have the expertise to welcome you in Canada,” says Champagne. “I truly enjoy explaining why Canada is the best place to invest. I can assure you that there’s more to come. Definitely the next piece of the puzzle is to get a battery manufacturing plant. Those are very live discussions.”

GM’s press release on the cathode factory is here.