Government of Canada tries to convince pension funds to finance EV battery plants

The Canadian government is trying to convince large domestic pension funds to help fund the country’s efforts to build dozens of electric vehicle (EV) battery plants and help Canada become the “green supplier of choice.”

The pension funds would see returns from then leasing the plants to the automotive industry.

Canada’s Minister of Innovation, Science and Industry François-Philippe Champagne said the potential partnerships would benefit both the pension funds and the automotive industry by growing the supply chain to meet the growing demands for EVs and EV batteries.

Champagne said that a single plant could cost as much as $5 billion, but the high price tag isn’t a detractor as the automotive industry will need dozens of them to meet future demand.

“So what I’ve been trying to discuss with them (and equipment manufacturers) is whether we can use pension funds where you have patient capital coming in helping to build these asset and then lease them back in order to accelerate and increase capacity,” Champagne said at the Bloomberg Canadian Finance Conference on Thursday. (via The Financial Post

By building them in Canada, this would also clear a “bottleneck” that Champagne says exists in using the abundance of raw materials available in Canada, like lithium, nickel, cobalt, manganese, and graphite.

Canada also has an advantage over other countries with similarly rich natural resources because of its proximity to major automotive industrial areas, like those in the Detroit-Windsor corridor, Champagne explained.

One major Canadian pension fund, the Canada Pension Plan, says it hasn’t had direct talks with Ottawa about helping to fund EV battery plants, but Michel Leduc, senior managing director and global head of public affairs at the Canada Pension Plan Investment Board, say it is something that would be “interesting to explore.”

Volkswagen and Mercedes-Benz to sign supply deal for EV battery raw materials with Canada [Update]

Are you buying a Tesla? If you enjoy our content and we helped in your decision, use our referral link to get a three month trial of Full Self-Driving (FSD).
Previous Article

Tesla Model 3 and Y now available in Malaysia on a Flux subscription

Next Article

Tesla’s output forecast shows a jump in production Q4 and steady growth through 2023

You might be interested in …