NanoXplore has a unique opportunityIf automakers are to meet their ambitious targets on electrification, substantial investment in battery manufacturing capacity and charging infrastructure will be required over the next decade. Battery performance (mileage per charge) and cost per kWh will need to improve substantially in order to get to the point where EVs can truly be seen as a viable alternative to the internal combustion engine.
Additionally, the supply of key battery making materials such as lithium and cobalt – which are already in short supply – will need to be addressed through some combination of increased mining capacity or technological developments that allow for the use of alternative resources.
Battery producers and auto manufacturers with in-house battery manufacturing capabilities are devoting substantial effort to improving battery technology in order to extend driving range and lower cost. Progress is being made.
In September, 2020 Tesla held a “Battery Day” where it estimated the Company would achieve a 56% reduction in cost per kWh over a three-year period, to be achieved through cell design, enhanced anode and cathode materials, and improved integration of battery cells into the vehicle. Emerging technologies such as solid-state batteries represent a potential break-through and step-change in battery life over Li-ion batteries if they can be successfully commercialized.
They also have the potential to reduce or eliminate the use of cobalt, which is mined primarily in the Democratic Republic of Congo – a politically unstable region with a history of human rights abuses.
Governments across the world are also taking action to encourage investment aimed at developing or expanding production of batteries and key battery making materials.
In Canada, the Federal Government is investing heavily in electrification and is targeting 100% of all new vehicle sales to be zero-emission by 2040 as part of its ultimate goal for Canada to be carbon-neutral by 2050. The Feds, along with the Government of Ontario have provided a portion of the financing for over $4 billion in investments Ford, FCA (now Stellantis) and General Motors have recently announced to produce electric vehicles in Canada.
Additionally, the Canadian Government is working to develop a Canadian battery strategy, a key element of which includes building critical mineral value chains to support battery production in Canada. NanoXplore has a unique opportunity to benefit from increased production of Li-ion batteries, as graphene can be used as an additive in anodes and cathodes to materially improve cycle life and charging time.
Additionally, the location of its key manufacturing facility – in Canada (near Montreal, QC) and close to the key mining regions in Quebec and Northern Ontario leaves the Company well-positioned to capitalize on opportunities that come from the build-out of a made-in-Canada battery industry. Martinrea would also participate in these opportunities through our 22.2% equity stake in NanoXplore.