Canada chosen for global EV battery research hub

German industrial technology giant Siemens is setting up a global EV battery manufacturing research and development hub in Canada, with about $150 million earmarked for three bases in Ontario.

The Munich-headquartered company said it would locate the first research and development (R&D) centre in its Canadian head office in Oakville, with future satellites in Toronto and Kitchener-Waterloo. 

The investment is a boost to the Canadian government’s $100-billion electric vehicle (EV) sector development strategy, which is struggling due to a slowdown in growth in demand for EVs in recent months and a deepening trade war with the US. 

Selecting Canada for the company’s new global R&D centre was driven by a combination of forces, Joris Myny, Siemens Canada’s senior vice-president for digital industries, told Canada’s National Observer in a written response to questions. 

Myny cited Canada’s “highly educated and diverse” workforce, wealth of mineral resources, and “huge ecosystem” of AI start-ups and R&D and technology labs. The Canadian EV ecosystem was being “well-supported” by provincial and federal government industrial strategies, he added.

'Vote of confidence'

Ontario Premier Doug Ford in a statement said the investment by Siemens is “a vote of confidence” in the province’s automotive sector workforce and its “growing end-to-end EV supply chain.” Ontario has pledged $7.2 million toward the R&D centres. 

Researchers at the new centres will be developing next-generation manufacturing technologies “with an emphasis on battery and EV production,” according to Siemens. 

The company added it would bring its expertise in AI and ‘digital twin’ engineering — where machine-learning software and computer modelling replace traditional industrial design processes — to create higher-quality batteries, greater workforce productivity and improved recycling practices.

Myny said a more circular economy approach was needed in the EV sector for it to become a commercially competitive market. He pointed to high battery scrap prices that added to the overall cost of production as an area where AI and other advanced technologies could be harnessed to both boost battery efficiency and lower unit costs. 

“We are confident that the work done at the center will lead to batteries of consistent higher quality, greater efficiency, and lower cost,” he said.

The investment aims to “foster collaboration with higher education institutions and battery manufacturers to innovate production in the industry,” said Siemens, and would create 90 new sector jobs in Ontario.

The investment news will buoy industry and government spirits during a difficult phase in the development of Canada’s EV sector. Global auto giants and battery-makers have pledged $46.1 billion in investments since 2021, with federal and provincial governments contributing $52.5 billion through subsidies and tax credits.

EV sector setbacks

But the number speed bumps has grown as sector projects are postponed or shelved in response to sputtering domestic EV demand. Battery-makers found themselves facing tighter margins in an overheated international market dominated by Chinese rivals.

The latest setback is the 25 per cent tariffs imposed by the US government — prompting Japanese auto manufacturer Honda and Volkswagen-owned battery maker PowerCo — two EV giants and key players in Canada’s strategy — to adopt a wait-and-see approach, with tens of billions of dollars of capital expenditure in limbo.

The US levies earlier this month proved the final straw for the troubled Northvolt Six gigafactory under construction in Quebec by the eponymous Swedish battery maker, which under financial duress had moved its North American operations into creditor protection earlier this year. 

The $7-billion plant, which was heavily underwritten by the federal and provincial governments, is now looking for a new owner after the parent company declared bankruptcy. 

Myny acknowledges the challenging market conditions for the EV sector currently, but highlights that the industry “has seen double-digit growth for several years [and is] here to stay.”

“Continuous investment in battery R&D will help manufacturers mitigate challenges and supply batteries at a scale the world needs,” he said, adding that the planned R&D centres would “enhance Canada’s competitiveness in the global battery market [and] contribute to the country’s economic growth.”