Automotive News Canada - April 2022 - 22

22
* APRIL 2022
ZEV TRANSITION:
THE SAME GOAL,
DIFFERENT ROADS
Government pushes
mandates; industry urges
incentives, infrastructure
By DAVID KENNEDY
T ORONTO BUREAU CHIEF
A NEW FEDERAL GOVERNMENT
plan to impose a sales mandate for
zero-emission vehicles (ZEVs) as early as
2026 has set Ottawa on a collision course
with Canadian dealer and automaker
groups that are championing a
different path to a fully electric
fleet.
Steven Guilbeault, minister
of environment and climate
change, introduced Ottawa's
2030 Emissions Reduction Plan
in Vancouver on March 29. The
government's 2022 budget, tabled
April 7, backed up the policies
with fresh funding.
The plan includes a mandate
that all sales of new light-duty
vehicles be ZEVs by 2035. It also
lays out stepped ZEV requirements
of 20 per cent of new
light-duty sales for 2026 and 60
per cent for 2030.
have to buy but by incentivizing them to
choose ZEVs, " said Tim Reuss, CEO of the
Canadian Automobile Dealers Association
(CADA).
Reuss was joined at a virtual press conference
April 1 by Brian Kingston, CEO
of the Canadian Vehicle Manufacturers'
Association (CVMA), which represents
the Detroit Three automakers in Canada;
and David Adams, who represents overseas
automakers as head of the Global
Automakers of Canada (GAC).
Instead of mandates, the three groups
said, the government should focus on amping
up its incentives for ZEV
buyers to encourage adoption.
This includes tripling the current
federal purchase incentive
to $15,000.
The planned ZEV mandates,
for which Ottawa intends to
write draft legislation as early as this
year, are one part of the government's
wider plan to cut greenhouse-gas emissions
by up to 45 per cent below 2005 levels
by 2030.
" Canadians just need to grab the reins,
have the guts and the brains and the foresight
to drive investment that supports
emissions reduction, create economic
opportunities and support workers. "
Guilbeault said at a Vancouver press conference
March 29.
INCENTIVES, NOT MANDATES
Canadian dealers and automakers say
they fully back the transition to ZEVs, but
organizations representing both groups
warned that mandates miss the mark.
" We believe there's a better approach,
and it starts with putting the consumer
first, by not mandating what they
Guilbeault:
" Canadians
just need to
... have the
guts " to invest
in emissions
reduction.
FILE PHOTO
" That is, yes, a lot of money, "
Reuss said. " It won't
be required forever,
but it will be
required to kickstart
this process
across Canada in all
provinces. "
CADA, CVMA
and GAC are also advocating for
an increase in the maximum eligibility
threshold for the federal
Incentives for Zero-Emission
Vehicles (iZEV) program.
Currently, smaller ZEVs selling
for more than $55,000 and larger ones costing
more than $60,000 are ineligible for the
incentive, which is a maximum $5,000.
To include more of the new ZEVs coming
to market, such as electric pickups
and utility vehicles, Ottawa needs to bump
the threshold, Adams said. Otherwise, the
government will be trying to force buyers
into less popular, smaller vehicles.
" It's almost like we're trying to put
square pegs into round holes in terms of
moving consumers into electric vehicles, "
Adams said, noting that about 80 per cent
of Canadian buyers today opt for pickups
or SUVs.
'OVERBUILD' CHARGING STATIONS
Expanding charging infrastructure is
another imperative for ZEV adoption, said
Kingston.
The federal government has pledged to
ROAD TO EVs
SPOTLIGHT
Under the federal government's Emissions
Reduction Plan, by 2035, all new light-duty
vehicles sold would produce zero emissions.
The plan also proposes ZEV requirements of 20
per cent of new light-duty sales in 2026 and
60 per cent for 2030. FILE PHOTO
build 50,000 charging stations to support
the transition to ZEVs, but Kingston said
this target falls well short of what's needed.
He estimates a ratio of one charger for
every 10 EVs will be required, translating
into several million chargers over the next
few decades.
" We're not suggesting that the government
build that whole network, " Kingston
said. " Of course there will be a private-sector
goal here. But in these early
years, where we're
trying to get adoption
levels up, we need to
overbuild. "
The 2022 federal
budget showed little
movement from Ottawa on any
of these auto sector priorities.
The federal government committed
$1.7 billion to extend the
iZEV program through 2025 but
did not increase the per-vehicle
purchase incentive. While
Ottawa pledged to broaden the
program to a wider range of
pickups and utility vehicles,
no details on vehicle models or
the possibility of higher price
thresholds were included.
The federal government did
put new money into charging
infrastructure, adding $400 million
over five years to the Zero-Emission
Vehicle Infrastructure Program. A further
$500 million from existing Canada
Infrastructure Bank funds will be
deployed to build out large-scale charging
sites.
MANDATES DO MATTER
Not all with a stake in the auto industry
see Ottawa's planned mandates as an
overstep.
Daniel Breton, CEO of Electric Mobility
Canada, a nonprofit that advocates for
ZEV adoption, said the mandates are welcome
and necessary to getting Canadians
into ZEVs.
" Considering the fact that more and
more jurisdictions are getting more and
more stringent, if we don't end up having
stringent regulations, we'll get the
crumbs, we'll get the leftovers of electric
cars that are not sold anywhere else, "
Breton told Automotive News Canada.
Higher incentives and expanded
charging infrastructure
should be pursed in tandem, he
said. But without a legislated
target, the auto industry will not
step up quickly enough, Breton
said.
Breton: " If we
don't end up
having stringent
regulations ...
we'll get the
leftovers of
electric cars
that are not sold
anywhere else. "
FILE PHOTO
" For me, to say that the carrot
alone works, it never did, it
never will. You need both carrots
and sticks. " Adding a ZEV
mandate, Breton said, puts
the burden on automakers as
opposed to consumers.
Breton, who has been
involved in consultations for the
new climate plan, said he was
also encouraged by Ottawa's
willingness to break from the
United States on ZEV policy.
U.S. President Joe Biden last
summer announced a voluntary
50-per-cent ZEV sales target for 2030, short
of Canada's plan to legislate a 60-per-cent
sales mandate by then.
Kingston of the CVMA said the break
from Washington threatens Canada's
entire auto sector, however.
" If we decouple from the integrated
North American market with a redundant
and unnecessary ZEV sales mandate, it
will threaten automotive investment jobs
and Canada's place in this emerging supply
chain. " - ANC
$50M Magna plant in Ontario will support Ford EV pickup
Lightweight
components called
'game-changing'
By GREG LAYSON
DIGITAL AND MOBILE EDITOR
CANADIAN AUTOMOTIVE
supply giant Magna
International setting up shop
in Chatham, Ont., to provide
Ford Motor Co. with battery
enclosures for the new Ford
F-150 Lighting electric pickup.
The facility, in the city about
80 kilometres east of Windsor,
will be a corporate extension
of Magna's current Formet
Industries operations in nearby
St. Thomas, where it primarily
makes seating and trim for the
auto industry.
Magna will invest $50 million
in the 170,000-square-foot
(16,000-square-metre) facility,
expected to create up to 150 jobs,
the company said in a statement
March 30.
" We have been able to
secure additional business
that allows us to grow in two
great communities, " said Mark
Johnson, Magna's Formet
Industries general manager.
The Chatham plant will build
the industry's largest lightMagna's
new plant will
boost production of battery
enclosures for the upcoming
Ford F-150 Lightning.
PHOTO: GREG LAYSON
weight aluminum battery enclosure,
said Magna, calling it
" game-changing. "
Ford has capped global reservations
for the pickup at nearly
200,000 units but has not said
how many of those reservations
have converted to orders.
Formet Plant Manager Phil
Page told the Chatham Daily
News that the new factory will
initially produce 60,000 battery
enclosures per year and then
expand to upward of 120,000.
According to the newspaper,
the enclosures will be built
at the former Crown Metal
Packaging plant, which produced
metal cans for food packaging
until 2015. The facility has
sat vacant since and will be renovated.
Page
told the Daily News that
more than $50 million will be
spent on the operation within
the first 18 months, with
the possibility of an additional
$50-million investment in the
future.
The announcement is one in
a string tied to the electric-vehicle
supply chain.
Earlier in March, General
Motors and BASF each
announced battery materials
processing plants in Quebec.
Honda then announced a retooling
of its assembly plants in
Alliston, Ont., to build hybrid
vehicles there. And on March
23, Stellantis and LG Energy
Solution together unveiled plans
for a $5-billion EV battery plant
in Windsor, Ont. - ANC
Automotive News Canada - April 2022

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