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canadian small-cap equities

ATS Automation

Tooling Systems

company name
ATS Automation Tooling Systems
core business
Factory automation
Cambridge, Canada
esg consideration
Electric vehicles 

Company Overview

Automation Tooling Systems (ATS) is a provider of innovative custom-designed automated manufacturing solutions to multinational customers. Its global capabilities encompass 50 offices and 20 manufacturing facilities in North America, Europe, Southeast Asia, and China. With successful completion of over 15,000 projects, ATS serves companies in the life sciences, consumer products, chemicals, electronics, transportation, and energy sectors.  
Decarbonizing transportation is an important part of meeting global climate change goals. With almost every major automaker announcing ambitious EV (electric vehicle) production targets, battery supply must scale up quickly to meet the growing demand. Bloomberg estimates that demand for lithium-ion batteries will increase tenfold in the next decade, but existing battery manufacturing capacity is insufficient to meet these demands. This is especially true in the U.S., where no supply chain exists for mining or manufacturing batteries, and there is a reliance on imported batteries from China.
offices in North America, Europe, Southeast Asia, and China
projects completed successfully

ESG Consideration

The growing need for EV manufacturing capacity benefits ATS’s transportation business, where they design and assemble automation systems for EV assembly and battery manufacturing. These activities now account for the majority of ATS’s transportation portfolio and encompass a wide range of Electric Motor (or E Motor) Manufacturing and EV Technologies. Some of ATS’s capabilities in its E Motor Manufacturing segment include rotor and stator assembly systems, rotor balancing and magnetization, automated conditioning stations, stator epoxy ovens, and assembly of permanent magnet and inductive rotors.
A machine at a manufacturing plant
Within EV Technologies, ATS manufactures and assembles systems to produce batteries, fuel cells, hair pin technologies, transmissions, steering, braking, and other EV components. The company also offers solutions in research and development, prototype equipment, and aftermarket equipment and services.
The growth of the EV market is more than just a business opportunity for ATS. The company sees its work developing and manufacturing cleaner sources of energy production and emission-free vehicles as a key contribution to a more sustainable future. With its best-in-class technology and extensive experience, ATS has positioned itself to benefit from increased interest in EV and is committed to a long-term goal of renewable energy.
Final thoughts
We are optimistic about the outlook for ATS’s EV business and believe that as the world decarbonizes, there will be major investments made in the EV supply chain. This positions ATS nicely, opening the company up to significant business opportunities in this space. The company not only benefits from this business opportunity, but also from its role in helping the world reduce carbon emissions.
Sources: Burgundy research, ATS filings
About the author
Andrew Iu
About the author
Andrew Iu, CFA
Vice President, Portfolio Manager, director of research
Having invested in small-cap stocks for years in his personal portfolio, Andrew converted a hobby into a career by joining the Canadian small-cap team at Burgundy. Six years later, the depth and inefficiencies of the small-cap market continue to captivate Andrew. Beyond analyzing small-cap stocks, Andrew builds and develops Burgundy’s analyst team in his role as Director of Research. He enjoys working closely with the team and feels that setting analysts up for success is one of the most rewarding parts of his role.
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