What amateurism on the part of the government of François Legault and his big boss in the battery sector, Pierre Fitzgibbon, the superminister of Economy, Innovation and Energy, and head of Investissement Québec.
They decided to invest billions of dollars of public funds in battery factories without first seriously studying the details of their public investment strategy in the electric vehicle battery market.
As my colleague Francis Halin reported last week, the state-owned company responsible for making investments in the battery sector, Investissement Québec (IQ), has no significant documents to provide on the various risks linked to public investments in this sector. With the exception of a 78-page study (redacted) by the Hatch firm, which concerns nickel supply. In this study, Hatch highlights the importance of securing this raw material in the battery industry.
In short, the Legault government seems to be going almost blind with its huge investments in the battery factory projects announced so far, namely those of Northvolt, GM / POSCO Chemical, Ford Motor and their Korean partners EcoPro BM and SK On.
Worse, the CAQ government did not even see fit to impose a Quebec content threshold on the battery sector it is developing with billions of dollars. There is no need to impose such a threshold, says Minister Fitzgibbon. Therefore, absolutely nothing compels Northvolt, GM or Ford to source from Quebec, both for raw materials and services.
Quebec’s investments in new battery factories are rightly causing a lot of concern. Allow me to repeat the inflammatory statements of two university professors who were reported to The newspaper this week.
Saidatou Dicko, professor of accounting sciences at the University of Quebec in Montreal (UQAM), governance expert: “The government must be more transparent and more demanding in terms of risk assessment. It doesn’t make any sense.”
Luc Bernier, professor at the University of Ottawa’s Graduate School of Public and International Affairs: “We put all our eggs in one basket. If in five to eight years the batteries are obsolete, what will we do with our factories , that will have cost us billions?
That said, the big investments in the battery sector are being made in concert with Justin Trudeau’s government. As we know, the federal government does not skimp on massive investments in battery factory projects, especially in Quebec and Ontario.
A study and it is urgent
With future federal, Ontario and Quebec investments of more than $40 billion in the battery sector, the goal is obviously to capture a relatively large share of the global electric vehicle battery market.
There is no doubt that this market will grow strongly.
According to firm Mordor Intelligence, the size of the global battery market is expected to grow from $50 billion in 2023 to $145 billion in 2028, with a compound annual growth rate of 23.5%.
Therefore, a huge potential for growth in sight.
But we must not lose sight of the fact that a large number of industrialized countries, including the United States, China and several European countries, are also part of the mad race for electric batteries by also investing massively.
In this era where battery factories are springing up like mushrooms in the industrialized world, it would have been essential for the Legault government to have had serious studies on the risks of investing so many billions in the battery sector.
This is even more important because the battery will evolve at high speed in the coming years.
It’s never too late to do the right thing.
Let Legault and Fitzgibbon stop treating us like pigs and immediately order a serious study before continuing their massive investments in the battery sector.
Of course, I invite Justin Trudeau and his Minister of Innovation, Science and Industry, François-Philippe Champagne, to participate in this crucial study, simply to ensure that we do not waste billions of public funds.