Automotive News Canada - November 2022 - 31

* NOVEMBER 2022
31
Pressure mounts for more cobalt
The refined mineral is
needed for EV batteries
and there's only one
plant in North America -
expected to open in spring
- that can provide it
By DAVID KENNEDY
T ORONTO BUREAU CHIEF
ELECTRA BATTERY MATERIALS
Corp.'s new cobalt refinery in northern
Ontario will not open until spring. But
after signing a supply agreement with the
world's second-largest battery-cell manufacturer
this fall, the upstart mineral processor
is already considering expansion.
The cobalt sulfate supply deal with
South Korea-based LG Energy Solution
(LGES), signed Sept. 22, will account for
about 60 per cent of Electra Battery's refinery
output during its first three years in
operation, said CEO Trent Mell. In addition,
demand from other players throughout
the electric-vehicle battery supply
chain is extremely strong.
" Truthfully, we could sell it all tomorrow, "
Mell told Automotive News Canada of
the plant's output.
Mell said he expects the company will
have another supply deal to disclose before
the end of 2022, and then " we're basically
taking orders on future expansion. "
In EV batteries, cobalt is used as a cathode.
It's usually a byproduct of copper and
nickel mining.
Construction on Electra's cobalt sulfate
refinery in Temiskaming Shores, Ont.,
about 500 kilometres north of Toronto, was
initially scheduled to wrap up before the
end of the year, but supply-chain problems
that affected " critical equipment " forced
the company to delay commissioning the
plant. Electra also boosted its cost estimate
for the project to between US $76 million
and $80 million, up from $67 million.
Mell does not expect any further delays
in the startup of what will be North
America's only cobalt refinery.
" I think we've got a handle on it. We
have pushed out our commissioning until
spring, but we feel pretty good with the
team and the long lead visibility we have
that we'll hit that. "
ELECTRA CONSIDERS A SECOND PLANT
Truthfully, we could sell it all
tomorrow. ...We're basically
taking orders on future
expansion.
TRENT MELL
CEO, Electra Battery Materials Corp.
As automakers pile into EVs and consumer
demand picks up, Electra looks to
scale up its cobalt sulfate capacity accordingly.
The company's new refinery will
produce enough cobalt for about 1.5 million
EV batteries per year, Mell said. But North
American demand will quickly outstrip
this figure, he said.
" We are looking to backfill on that, to
add to the capacity at our current plant in
Ontario. "
Electra is also looking at a second cobalt
refinery in Bécancour, Que. General
Motors is building a battery-material operation
- as is a joint venture between Posco
The cobalt feedstock for Electra Battery Materials' refinery will come mostly from
the Democratic Republic of Congo. It " is just a massive supplier and it will take
years for us to find a full domestic solution, " said Electra CEO Trent Mell.
PHOTO: ELECTRA BATTERY MATERIALS CORP.
Chemical and BASF - in the fast-evolving
hub midway between Montreal and Quebec
City, and the proximity to potential customers
would provide the opportunity to
build an integrated plant, Mell said.
Electra is working on a pre-feasibility
study into a refinery in Bécancour and is
doing preliminary engineering.
" There's every reason to believe that a
big, big portion of our capital is going to be
funded through provincial and federal support,
and so that really does lower the hurdle
rate for us to make a go of it, " Mell said.
" And to the extent we're able to take orders
today on future deliveries from that plant,
that'll bolster it as well. "
If all proceeds as planned, Mell said,
shovels could be in the ground on a second
plant as early as late 2024 or 2025.
CONGO IS THE SOLE SOURCE, FOR NOW
While Electra works to localize cobalt
refining within North America, most of its
feedstock will come from a familiar overseas
source. The Democratic Republic
of Congo, where about 70 per cent of the
Ready for an EV wave? Shockingly, no
Retailers must retool
how they service and
make money in the
EV area, analyst says
By DOUG FIRBY
CALGARY CORRESPONDENT
DEALERSHIPS ACROSS CANADA
are gearing up for increasing sales of
electric vehicles, but the changes they
face are coming on many fronts and
sometimes at significant cost that could
burden their franchises.
" I don't think the average dealership
is ready at all, " said Daron Gifford,
a partner in the Detroit-based accounting
and consulting firm Plante Moran,
which tracks automaker-dealer relationships.
" That applies to both Canada and
the [United States]. People aren't trained
enough. "
An anticipated decline in service needs
for EVs compared with vehicles powered
by internal-combustion engines puts dealerships'
profit margins at risk, he said.
" How do they make their margin? "
Gifford said. " Some dealerships can't
afford to put $1 million into a dealership
and then not have a profit model. "
Ford Canada has taken a hard line
with its dealers, following a similar position
in the United States. Canadian dealers
have until Dec.
16 to choose whether
to enroll in the
Model e Certified
or Certified Elite
program, which
begin in 2024.
A Ford Canada
spokesman said
the Certified program
requires
about $560,000 to
join, while becoming
Certified Elite
requires an investment
of about $1.3
million. About
90 per cent of the
investment is
charging infraGifford:
" I don't
think the average
dealership is
ready at all " for
EVs. " People
aren't trained
enough. "
PHOTO: LINKEDIN
structure, including DC fast chargers,
Ford said.
Certified Elite dealers will focus
on ownership, charging and full sales
capability through a digital shopping
experience at ford.ca. Certified dealers
will have limited build-to-order sales.
Dealers who choose to not enroll in
either program will be limited to selling
internal combustion engine and hybrid
vehicles, as of June 1, 2024. However,
those dealers can join one of the programs
in 2027.
DIFFERING APPROACHES TO EV UPGRADES
The other two Detroit-based automakers,
General Motors and Stellantis, are
taking a " kinder, gentler approach " with
dealers who are hesitant about making
the investment, Gifford said. They are
also watching Ford for lessons on how to
motivate dealers to get ready for EVs.
" There is a lot of denial happening out
there " with dealers, he said. " But interest
is growing. "
The EV investment is not the
only issue for dealers, Gifford said.
Automakers are also shifting toward a
made-to-order or even an agency model
- dealers receive a commission for selling
vehicles owned by the automaker -
and are backing away from the typical
practice of providing incentives for dealerships
to have vehicles in stock.
Dealers can learn from Tesla's creation
of mini-malls located alongside
their charging stations. There, customers
can browse and buy products while
they wait for their vehicles to charge,
Gifford said.
In the future, dealerships could become
diversified retailers, selling nonautomotive
products, he said. Such strategies
could help close the revenue gap. - ANC
world's cobalt is mined today, will underpin
the Ontario refining operation, Mell
said. Longer term, the company aims
to add streams from local recycling and
mines closer to home.
" There'll be a balance, " he said, " but
the Congo is just a massive supplier and it
will take years for us to find a full domestic
solution, though anything will help. "
The company's ambitions also extend
beyond cobalt.
Electra began commissioning a demonstration-scale
battery recycling plant at its
northern Ontario site in October and plans
to push into nickel sulfate production, adding
another key battery ingredient to its
portfolio.
LGES, which is building battery cells
with GM and Stellantis in North America,
is a potential partner for these plans, Mell
said. Electra's cobalt supply deal with the
South Korea company is just " step one. "
" There's other things we can [do] and
I think will be doing with LG, " Mell said,
" and hopefully with at least one other automaker
in the months ahead. " - ANC
Hyundai, Genesis
dealers onboard
with EV transition
CONTINUED FROM PAGE 9
All of Hyundai's 224 Canadian dealerships
and 30 Genesis retailers are onboard
with the transition to EVs, said Hyundai
Canada CEO Don Romano. Collectively,
they have invested $750 million in store
upgrades, training and infrastructure such
as chargers.
That has put them " much further ahead "
of Hyundai Canada's U.S. counterparts,
Romano said.
Genesis is also ahead. By 2025, it will be
selling EVs only, said Eric Marshall, director
of Genesis Motors Canada.
This summer, the company gathered its
staff to drive Genesis EV products and gain
firsthand knowledge.
It was important to have the Genesis dealerships
EV-ready because, Romano said,
" we have to give the mass market a comfort
level " that the EV they buy will be supported.
Ali
Sobani, manager of distributor and
dealer development for both Hyundai and
Genesis in Canada, said Bosch will supply
chargers, special tools and training to
Genesis dealers. All Genesis distributors in
Canada are certified to service EVs, he said.
- ANC
http://www.ford.ca
Automotive News Canada - November 2022

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