Tesla’s Machines Building the Machine in Canada
Lifting the curtain of secrecy covering many of its activities, Tesla recently offered glimpses into its expanding presence in Canada, where this innovative automaker is building some of the “machines that build the machine”, in the words of Elon Musk, its visionary founder.
Released just in time for Thanksgiving, a video introduces its team in Ontario, where new custom manufacturing equipment is being designed and built, that will subsequently be used in its assembly plants elsewhere in the world.
Third Quarter Progress Report
As Tesla was presenting its 3Q 2021 earnings, interest focused on delivery of the first vehicles powered by 4680 cells. Chief Technology Officer Drew Baglino confidently mentioned early 2022, asserting that structural aspects, as well as battery, crash, range, and reliability testing would be completed by the end of the year.
While stressing that the main focus is on quality for producing these battery cells, he issued a caveat, recalling that there might still be unknown hurdles in this new type of battery architecture. As noted by Drive Tesla Canada, a charging team and manufacturing teams are already part of the Tesla presence in Canada.
Tesla Canada gears up for Zero Emissions in 2035
After a tentative start, the Tesla presence in Canada is expanding at a steady clip. Despite its relatively small auto market, Canada is an attractive location for this innovative automaker. At the consumer level, Tesla currently has 25 retail and service facilities scattered nationwide.
Underpinning these attractions are strong federal and state incentives spurring electric vehicle sales, pursuing the mandatory target set by the Canadian government for all new light-duty cars and passenger trucks to be zero-emission by 2035. Noteworthy among them are the:
- Electric Vehicle and Alternative Fuel Infrastructure Deployment Initiative, set up to establish a coast-to-coast network of fast-charging stations along national highways, with natural gas refuelling stations along key freight corridors and hydrogen refuelling stations in major metropolitan areas;
- Zero Emission Vehicle Infrastructure Program (ZEVIP), which is a five-year initiative ending in 2024;
- iZEV Incentive Program, offering all Canadians up to $5,000 toward the purchase of a Zero-Emission Vehicle (ZEV), usually fully electric or a plug-in hybrid;
- Scrap-It Incentive Program provides up to $6,000 for scrapping the gas-powered vehicle and replacing it with a low-carbon means of transportation, which includes electric vehicles;
- Charging rebates of up to $2000 per charger for apartments, condos, and office buildings, capped at $14,000;
- Home Charging Station Rebates of up to $750, limited to EV drivers in New Brunswick receiving Plug-in Rebates.
Activities in Canada
While not producing vehicles or even parts, Tesla Canada joins the EV supply chain even further upstream, focused on machines for building machines, and particularly interested in manufacturing its own battery cells. With this growing R&D presence, Tesla now has a Canadian workforce of over 1,200 employees and is still actively recruiting for many new positions.
Most Tesla investments in Canada are still focused on batteries, including the acquisition of Hibar Systems in Ontario, a manufacturing equipment company that produces machines used to make battery cells. At the same time, an advanced battery research team has set up a battery-related research and development centre at Innovacorp in Dartmouth and is working with the Battery Lab at Dalhousie University in Halifax, both in Nova Scotia.
So far, at least six patent applications have been filed with lithium-ion battery development pioneer Jeff Dahn and his team listed as co-inventors. This is not unexpected, as one of his PhD students – Novonix CEO Chris Burns – was also involved with the Tesla facility in Halifax, with over a dozen of his former students and researchers working for Tesla at some point.
Canadian Partnership began in 2012
Hiring Dahn students and graduates since 2012, Tesla CEO Elon Musk decided to underwrite a partnership with this research lab, firmed up in 2016. Backed by almost a quarter-century of experience in this field, Dahn was a natural choice to forge ahead with the research needed to drive electric vehicle battery technology into the next generation.
Ranking high among the world’s most active battery researchers, this group has published over 600 academic papers, with Dahn appearing as a co-inventor on close to four dozen battery patents that date back to 1988. In fact, his Dalhousie team developed the chemistries that are used today in one out of every ten electric vehicles.
Global Exports from Canadian Plant
The first Tesla Canada manufacturing facility opened recently in Markham, Ontario. In operation since the summer, it will produce state-of-the-art battery production equipment, adding yet another strut to the burgeoning automotive and high-tech ecosystem in this region. Its output will be used at Tesla gigafactories all over the world.
Under Dahn’s leadership, this team of battery experts was a key factor in Tesla’s plans for a 2022 launch of Model 3 sedan in China, fitted with an innovative long-life that low-cost battery. The end goal is to bring electric vehicle prices down to levels that compete with the gasoline counterparts, with EV batteries having second and even third lives in power grids.
Although based in the USA, Tesla has a headcount of over 100,000 worldwide, and is moving steadily into other markets. In addition to Canada, its North American operations include
- Giga Fremont: the Tesla mothership, covering a massive 5.3 million square feet, this is where Tesla produces most of its key components, in addition to building Model S, Model X, Model 3, and Model Y vehicles;
- Giga Nevada: supplies the battery packs for the Tesla electric vehicles, except vehicles produced at Giga Shanghai;
With activities expanding rapidly across the globe, its plant-building efforts in China and Germany are perhaps the best-known:
- In China, the Shanghai gigafactory making Model Y sport utilities and Model 3 sedans sold 56,006 in September 2021, 3,853 of them exported;
- In Germany, Tesla’s gigafactory is back on track for a year-end 2021 opening, and is currently awaiting its final operating permit from the local authorities;
What’s the next step for Tesla?
All these cutting-edge activities raise an obvious question: is Tesla thinking about setting up an auto assembly plant in Canada? As gas pump prices reach record highs (tipped to top $1.50 a litre in 2022), even truck-loving Canadians are starting to think twice about their gas guzzlers.
With EV prices dropping steadily to well under $50,000, a hybrid or even an all-electric should be well within the reach of most family budgets, especially as long-term auto financing is easily available over 96 months. By the end of this decade, some 75% of auto sales will be zero-emission – which means the vast majority of Canadians will be plugging in, rather than gassing up.