Good morning and good afternoon from London, U.K.
We are in the midst of a global battery arms race, where the world's major economies are building a base to the energy storage revolution. The lithium-ion battery is the platform technology to unlocking the vast potential that energy storage holds for our world through electric vehicles and stationary storage systems. This race to build global battery capacity has seen a number of megafactories or gigafactories in the pipeline go from three in 2015, to 192 today.
China and Europe have led this charge, but North America is just beginning its journey. The importance of these battery megafactories cannot be underestimated. They not only provide the necessary lithium-ion battery cells at scale and low cost to tap into this mega trend, but these supersized battery plants are becoming physical embodiments of a country's industrial and technological ambition.
Due to significant investments made today, by 2030, China and Europe will hold the sway of this industrial power, accounting for 67% and 18% of the world's battery capacity, respectively. North America will presently hold just 12%, a fraction of what it needs today, and a number that's at odds with its global energy and automated position.
Access to low-cost lithium-ion batteries will be one of the factors in determining which economies come out on top in the race to decarbonize the world. However, this is not just a battery game, but one of supply chain dominance. As it's known to all of our Canadian customers and friends, this begins in the ground at mine level.
While 25% of the cost of an electric vehicle is the lithium-ion battery, 80% of the cost of the battery is the minerals, metals and chemicals that go into it. In the end, a fundamental limiting factor is access to quality raw materials and chemicals at a stable long-term price. While the world's governments and automakers focus on building EVs and battery plants, a true leader has yet to emerge in building the supply chains to feed them. At Benchmark, we call this the great material disconnect between those making the EVs and the miners and chemists building the specialty materials to go into them.
Canada is a country built on understanding the importance of these supply chains. Your country has some of the richest resources of EV minerals and metals, such as lithium, nickel, cobalt, graphite, manganese, copper and rare earths. Just as importantly, you have the people, the know-how, and the technology to be able to access these resources in a responsible and economic way. As a result, Canada holds the potential to create the upstream blueprint for this global energy storage revolution.
While the world looks one way to build EVs and battery cells, Canada should look the other way, upstream, to not only ensure the basic supply of raw materials for this revolution, but add the value, make the chemicals, the anodes, the cathodes, even maybe 100% Canadian lithium-ion batteries from mine to sale.
This has been China's approach. China has built dominance in the supply chain from more than a decade of investments. Despite the common misnomer, only 23% of all battery raw materials are mined in China, but 80% of battery chemicals are refined there. Having huge midstream capacity ensures these key raw materials flow into China to be value-added. It also translates into creating trillions of dollars of value in downstream industries.
This is a game of raw material musical chairs, and with no country willing yet to take a leadership position, the music will stop and with it, the electric cars and the energy storage systems needed to decarbonize the world will grind to a halt.
Canada holds the ingredients to solve this problem. To make this happen, Canada needs to align policy, legislation and funding at both the federal and provincial levels.
The European Union recently invested three billion euros into the battery supply chain, which will spark three times the amount of private investment. The United States, investing $20 billion into the semiconductor supply chain last year, is also an apt example. The world's major economies are rapidly realizing that their economic security is national security, and that the lithium-ion battery supply chain is the battleground.
I would like to thank the committee, Chairman James Maloney and Vice-Chair Greg McLean for inviting me to speak on this subject.
Thank you.