Canada’s ambitions of becoming an electric-vehicle powerhouse are being newly fuelled by interest from Tesla Inc. TSLA-Q in locating a major manufacturing facility in Ontario.
While rumours of such an investment by the pioneering EV maker were kick-started last week by CEO Elon Musk’s offhand remarks during a shareholders’ meeting, an apparent recent shift in the company’s lobbying efforts offers more substantive evidence of the possibility.
Tesla’s engagement with Canadian governments to date has mostly been focused on policies to drive EV demand among consumers, such as the build-out of charging infrastructure.
But its filing with Ontario’s lobbyist registry was updated in late July to include requests for changes to speed up permitting processes and boost incentives to make the province more attractive to “advanced manufacturing investment.”
At the federal level, meanwhile, records show that a meeting took place in late June between Tesla and two senior officials in the office of Industry Minister François-Philippe Champagne, who is the point person for Ottawa’s efforts to attract auto-making investment.
Although it’s unclear how advanced those discussions are or what scale of investment they could involve, it’s known that Tesla is exploring locations for a new Gigafactory – a type of massive facility that the company wants to use to bring everything from battery-making to assembly to recycling under one roof.
Mr. Musk said at the meeting last week that he might settle on a location by the end of this year, before seizing on the number of attendees shouting out Canada to suggest he might be swayed by his Canadian heritage. (Born and raised in South Africa, he has Canadian citizenship through his mother and briefly lived in this country.)
“We got a lot of Canada,” he said. “I’m half-Canadian – maybe I should.”
While his comments were obviously lighthearted, Ontario has cause to try to seriously compete in a stiff competition to land Tesla’s operations, at a pivotal moment for the development of the continental auto sector.
New U.S. subsidies for electric-vehicle purchases, as part of a massive climate spending package expected to make its way through Congress by the end of this week, are likely to significantly accelerate the already quickening market shift away from gas-fuelled vehicles. And Ontario Premier Doug Ford, initially a skeptic of that transition, has more recently made building an EV supply chain a centrepiece of his economic strategy.
“Ontario is now firmly on track to become a leading electric-vehicle production capital of North America,” said Tuesday’s Speech from the Throne to launch his government’s second term, touting nearly $16-billion in recent sectoral investments.
So far, the province has joined forces with the federal government – partly through the use of generous subsidies – to persuade automakers with long histories in Ontario to use it as a base for EV-making. That most recently included the announcement of a $5-billion joint venture between Stellantis NV and South Korea’s LG Energy Solution to establish Canada’s first large-scale EV battery plant in Windsor.
Tesla, however, has made only small forays into Canadian manufacturing so far, such as a factory in Markham, Ont., to produce battery-making machines.
Were it to put down much deeper roots in Ontario, it could be a boon to more than just the province’s manufacturing industry. Another ambition highlighted in the provincial Speech from the Throne, and shared by Ottawa, is to make northern Ontario (as well as Quebec and other parts of Canada) a major supplier of the critical minerals needed for EV batteries.
Both levels of government have been hoping that major battery-making commitments by automakers will provide anchor clients to help spur mining investments.
Neither government offered any specifics when asked on Tuesday about their recent engagement with Tesla, or even mentioned the company by name in statements they provided.
“We are building an end-to-end supply chain right here in Ontario, and expect to continue to see more companies from around the world looking to our province as a place to invest and grow,” Ontario Economic Development Minister Vic Fedeli said.
A spokesperson for Mr. Champagne wrote: “It is good to see that our government’s investments are attracting the attention of automakers and companies from around the world. We will continue to do everything to ensure that Canadians can benefit from the global transition to electric vehicles.”
Tesla itself has not yet responded to a request for comment.
That leaves Mr. Musk’s remarks last week as the company’s lone public comments of late on the possibility of a Canadian factory.
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