Ontario’s Mineral Wealth Attracts Tesla to Secure Battery Supply Chain

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According to documents filed with the Ontario government, Tesla has been actively exploring opportunities to establish an industrial facility and mining operation in Ontario, Canada. The aim of the company is to gain more control over its electric vehicle battery supply chain by securing access to the necessary minerals for battery production. With its established nickel and cobalt mining industry, Ontario offers a preferred location for Tesla’s new factory and mining facility.

By setting up operations in Ontario, Tesla aims to tap into the rich deposits of critical battery minerals found in Canada. The company’s strategic move would allow it to secure a partnership closer to its target market in the United States and reduce dependence on countries far away. Engaged in discussions with Ontario officials, the company has hired an Ontario battery expert as a critical minerals and supply chain policy advisor.

The government of Ontario has been proactive in attracting investments in the automotive industry and the EV sector. The state has explored incentive programs and increased investments, including $25 billion over the past two and a half years. The aim of these efforts is to make Ontario more competitive, lower the cost of doing business, and stimulate economic activity. Although the exact details of the partnership between Tesla and the Ontario government have not yet been disclosed, it is expected to be mutually beneficial.

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While the government would experience economic expansion within the province, Tesla would gain access to the valuable minerals in Ontario. Emphasizing the attractiveness of the province and its ability to provide competitive approval timeframes, both parties have filed paperwork to establish an industrial plant in Ontario. Given the destructive nature of the mining process, it is worth noting that concerns exist regarding the environmental impact of mining these minerals. Regions with high mineral deposits are becoming highly contested and profitable as the demand for electric vehicles, smart phones, and other devices increases.

Given the finite supply required for battery production, however, EV manufacturers like Tesla have A financial stake in controlling access to these resources. Recognizing the importance of securing a reliable supply chain for its electric vehicles, Tesla began lobbying the Ontario government for battery production facilities in August 2022. The company’s goal of gaining more control over its electric vehicle battery supply chain has driven Tesla’s interest in establishing a factory and mining facility in Ontario, Canada.

Abundant mineral deposits in Ontario, particularly nickel and cobalt, make it an attractive location. By reducing dependence on distant countries, Tesla can ensure a closer connection to its target market by securing a partnership in Canada. In turn, the Ontario government benefits from increased economic activity and investments in the automotive industry.

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