A German chemical company has chosen Quebec to build what it says is the world's largest facility for the production of a key material used in promising rechargeable battery technology for electric vehicles.
Sud-Chemie AG is investing almost $80-million for the construction of a new production facility in Candiac, Que., south of Montreal, to make lithium iron phosphate (LFP), an energy storage material used in batteries for electric vehicle drives and other applications.
Sud-Chemie, through its Canadian subsidiary Phostech Lithium Inc., already produces a different grade of LFP at its existing plant in Candiac.
The investment, expected to create about 50 skilled jobs, provides a boost to Quebec's e-vehicle technology sector, which suffered a blow last year when Zenn Motor Co. Inc. of Toronto stopped production of its low-speed electric vehicle at its St-Jérôme, Que., plant.
Sud-Chemie says it plans on launching commercial production in 2012, with sufficient output to supply 50,000 all-electric autos, or 500,000 gas-electric hybrids, per year.
"This will revolutionize the market for [electric- and hybrid-vehicle]batteries," said Michel Parent, director of sales and marketing for Phostech Lithium.
LFP is more stable and allows for a higher degree of energy storage than rival materials, he said.
He declined to say whether or not the various governments are kicking in subsidies or other forms of financial backing in support of the venture.
He also would not provide details on customers or which automobile manufacturers might be interested in the product.
"This is definitely good for Quebec," said Khurram Malik, a clean-technology analyst with Jacob Securities Inc. in Toronto. But he added that LFP technology and other electric-car battery technologies have a ways to go before they are deemed economical.
"A lot of this technology is still just too expensive and too heavy," he said.
A recent Boston Consulting Group study concluded that significant technical breakthroughs are required before rechargeable batteries make for economically viable hybrids and e-cars.
There must be a substantial increase in battery energy and storage capacity and a lowering of the manufacturing and materials costs, the study said.
"For years, people have been saying that one of the keys to reducing our dependence on fossil fuels is the electrification of the vehicle fleet. The reality is electric car batteries are both too expensive and technologically limited for this to happen in the foreseeable future," said Xavier Mosquet, the Detroit-based leader of Boston Consulting Group's automotive practice who co-authored the study.
On a related front, Hydro-Québec has partnered with Mitsubishi Motor Sales of Canada and the city of Boucherville, Que., on a pilot project to test electric vehicles in real-world driving situations. The $4.5-million test will use 50 Mitsubishi i-Miev cars, starting this fall.