President Yoon to Visit Canada Next Week
Canada is emerging as an alternative to China for electric vehicle (EV) battery material and component supply after the U.S. Inflation Reduction Act took effect last month. Canada is home to large nickel, cobalt and graphite reserves and European automakers are expected to cooperate more with South Korean EV battery suppliers in Canada in trying to raise their share in the U.S. EV market.
South Korean President Yoon Suk-yeol is scheduled to visit the United Kingdom, the United States and Canada from Sept. 18 to 25. In Canada, Prime Minister Justin Trudeau and the president are expected to discuss bilateral economic cooperation, including that in the EV industry.
LG Energy Solution, SK On and Samsung SDI are expecting that the summit will facilitate their nickel procurement, which is essential for their flagship high-nickel batteries. In 2020, Canada produced 167,000 tons of nickel and was the sixth-largest nickel supplier in the world. According to the International Energy Agency, it is expected to rise to fourth in 2025, behind Indonesia, the Philippines and Russia.
According to the Inflation Reduction Act, 50 percent of an EV subsidy of US$7,500 per vehicle is given only when at least 40 percent of the key minerals in the battery of the vehicle were mined or processed in the United States or its FTA partner. The minimum requirement will be raised to 50 percent in 2024 and 80 percent in 2027. The other 50 percent of the subsidy is given on condition that at least 50 percent of the key components including cathode and anode materials are made in the USA.