A Canadian battery startup is striking while the iron is hot.

When Ford Motor Co. announced last month that its new Michigan plant would be part of its work with Chinese battery maker Contemporary Amperex Technology Co., Limited (CATL), it was confirmation of some long-awaited news. 

As my colleague Jesse exclusively reported last year, the deal will likely support Ford’s investments to build EVs in Canada.

But amid growing geopolitical tensions with China, politicians and commentators reacted with surprise. 

Both Ford’s interest in CATL and the backlash to the deal could prove to be opportunities for the B.C. startup Nano One, which is working on a North American alternative to CATL’s technology that has deep roots in Quebec.

Ford sought the deal with CATL because the Chinese giant makes a type of lithium-iron-phosphate battery called LFP. (Iron is “Fe” on the periodic table.) The automaker is betting this type of battery—an alternative to others’ lithium-ion cells made with nickel, cobalt and manganese—can be made more affordably because it uses “fewer high-demand, high-cost materials.” In simpler terms: North America can make iron cheaply and plentifully; cobalt, not so much.  

Ford’s (and Tesla’s and Rivian’s) choice to pursue the iron batteries validates decades of Canadian research on the technology by Hydro-Québec and the Université de Montréal, which has been pursuing the technology since the 1990s alongside scientists like Nobel Prize winner John Goodenough. 

But the North American business community had all but written off iron batteries until Chinese companies like BYD recently showed their commercial potential, Nano One’s chief technology officer Stephen Campbell told The Logic this week.

“It’s really funny because even as recently as three years ago, when we were talking about our development and the LFP process, people were telling us, ‘Why are you bothering with LFP? LFP’s dead.’” 

That’s changed. The Toronto-based consulting firm Adamas Intelligence estimated that in the first half of 2022, the deployment of LFP cells increased 237 per cent globally, compared with the same period of 2021. The technology, once thought to have less powerful driving range, has proven to have advantages in terms of safety and stability, Campbell said. 

So as the owner of the only fully operational LFP plant in North America, Nano One is in expansion mode, looking to scale its 2,400-tonne-per-year operations to up to 30,000 in Quebec, and eyeing the construction of another big plant in a yet-to-be decided location. Adam Johnson, Nano One’s senior vice-president of external affairs, told The Logic the company will consider growth in Quebec, the U.S. and Europe.

“For 10 years … the plant at Candiac has been happily making LFP successfully in North America, ” Campbell said, citing Nano One’s existing facility located in a Montreal suburb. 

“If you’re going to make LFP, one of the best places to make it is in Quebec, is in Montreal, and arguably Canada. Because all the expertise and how to do it is already there.” 

China still dominates the LFP market—thus Ford’s interest in CATL. But U.S. senators like Marco Rubio and Joe Manchin have raised worries about deepening dependence on China, which dominates the battery-mining industry. Chinese officials are exploring their own concerns. 

Campbell said there’s newfound interest in local companies like Nano One. Though the company has only publicly disclosed its work with Volkswagen, Johnson said it’s working with a wide array of automakers.  

“The commercial sources of lithium ion phosphate … 99 per cent of them are in China,” he said. 

“We need to build independent battery supply chains from the ground up, in North America and in Europe, to protect us from the global politics—and the tensions that occur, and pandemics and all the rest of the things—that can really mess up the global supply chain. … So, it’s a unique opportunity for us.” 

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