Automotive News Canada - April 2022 - 10

10
04.22
OPINION
There's now a playbook
to court EV investment
Every city that
wants to be
part of the
electric-vehicle
revolution should
review how
Windsor got the
LG-Stellantis
deal done.
IF YOU LOOK OUTSIDE, IT'S RAINING
money for electric-vehicle battery
plants and their supply chains. There
are light showers at the moment, but
the forecast calls for a deluge.
As with rain, such money comes
pouring down in pockets, so the
tricky part is
attracting it.
There has to be a
plan.
The $5 billion
that will be
invested to create
an LG-Stellantis
battery plant in
Windsor, Ont. -
the biggest single
investment in
Canadian automotive
history, by
the way - didn't
just fall from the sky. Windsor, specifically
Invest WindsorEssex, had its
ducks in a row and then did the rain
dance of its life.
There are countless moving parts
to such a deal, but key among them
was that Windsor preemptively
assembled a turnkey commercial land
package located near key transportation.
It's no
exaggeration to
say that when
Windsor was
approached by
LG Energy early
last year about
establishing an
EV battery plant,
Invest
WindsorEssex
merely dropped
a folder on desk
and said, " Here
you go. "
Yes, without
a Stellantis vehicle-assembly plant in
Windsor, the deal might not have
gone through. And without significant
government money, the deal also
might not have gone through. But
what is certain is that if the city of
Windsor did not pull together the
right plot of land in the right spot and
offer it to the LG-Stellantis joint venture
for the right price - on a lease
basis - the deal definitely would not
have gone through.
How " Windsor got the deal done "
is detailed in a story by Managing
Editor Grace Macaluso on Page 17,
and in an age of disappearing indusEDITOR-IN-CHIEF
JEFF
MELNYCHUK
trial
land, having the right package
was the deal maker.
This is not the only example. Just
ask Sarah Houde, CEO of Montrealbased
Propulsion Quebec (Page 19),
which put together the deals for two
big-money battery-materials plants in
Bécancour, Que., located equidistant
between Montreal and Quebec City.
Bécancour's chief advantage is
strong infrastructure links through rail,
road and a deep-water port (Page 1,
March edition). The right land package
in the right spot, and at the right
price and at the right time. Sound
familiar?
In Windsor's case, there was
some risk as there were no guarantees.
Invest WindsorEssex knew the
rough size of the land package needed
to support a large-scale battery
plant. The city owned some, but it
had to purchase
the bulk
of it from multiple
owners.
But after all
that, would
there be suitors?
What if it
was all for
Invest WindsorEssex had its
ducks in a row to court a $5-billion
LG-Stellantis battery plant.
SUPPLIED PHOTO
naught and the
220 acres (90
hectares) of
bowling-alley
flat land sandwiched
by rail,
highway and
international airport sat vacant forever?
No
such problem. Before the
LG-Stellantis deal, Invest
WindsorEssex was in other discussions.
Its preparations are considered
the catalyst that got the deal signed.
Whether we realize it, Windsor just
handed a playbook to every other
Canadian city about how to attract
battery-plant investment. With billions
more dollars coming (story on Page
18), cities should be prepared
because this is just the beginning.
It's raining and the forecast calls
for a deluge. - ANC
DIZZYING STICKER PRICES AND
record highs at the pump haven't
pushed Canadians' love affair with
SUVs and pickups to the breaking
point, but government policy on
electric vehicles just might.
It doesn't take long to add up
the number of electric SUVs available
in Canada that qualify for
Ottawa's $5,000 Zero-Emission
Vehicles (iZEV) incentive: It's exactly
zero.
The debate:
Should large,
excessive
vehicles, just
because they're
electric,
qualify for
rebates aimed
at conservation?
Add in
the handful
of hotly
anticipated
electric pickups
coming
to market in
the next
couple of
years, and
based on
their expected
prices,
the total
number of eligible large vehicles
will still be nil.
It's not until smaller electrics
are factored in that Ottawa opens
its wallet. Currently, eight squeeze
in below the incentive threshold of
$45,000 to $60,000, a sliding
scale based on the number of
seats in the vehicle and base-model
price.
This cutoff will force Canadian
WRITE TO US:
We invite letters from our readers for publication (250word
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Email letters to Grace.Macaluso@autonews.com
If EV rebates favour the environment,
should they not favour small vehicles?
affordable vehicles but smaller
vehicles.
DAVID
KENNEDY
TORONTO
BUREAU
CHIEF
consumers to make a stark
choice. They can forgo the $5,000
incentive - and any corresponding
provincial rebates - and go
with larger, more expensive vehicles,
or buy less car and save the
cash.
Putting a target on larger vehicles
might even be part of
Ottawa's plan, if the overarching
goal is coaxing Canadians to buy
smaller EVs instead of electric
SUVs and pickups.
Batteries, by their nature, are
heavy. And compared with their
gasoline and diesel counterparts,
EVs are, too. The bigger the EV,
the larger the battery it requires to
drive the same distance, adding to
life-cycle costs, from battery-material
mining to manufacturing. The
higher relative weight of larger
vehicles even contributes to quicker
road degradation, taking a toll
on both infrastructure and the
environment.
The federal government isn't
spelling this out, but its threshold
for incentives favours not just more
The auto sector wants to see
the incentive broadened, saying
the cost cap will dampen EV
uptake.
Tim Reuss, CEO of the
Canadian Automobile Dealers
Association, said raising the eligibility
threshold should be an
immediate priority.
" There are quite a few jurisdictions
in Canada where buying a
pickup or a large SUV is a necessity.
It is not a life choice, " he said
in a virtual press conference
April 1. " People need the pickup
for their work and their private
lives.
" What is a person to do that is
looking for that vehicle, and it's
either not available or not incentivized?
Is he now supposed to buy a
subcompact car for his needs? "
So far, it's unclear whether
Ottawa is going to change tack. In
its 2022 budget, tabled April 7,
the government said it planned to
broaden the incentive program to
include more vans, pickups and
SUVs but offered no further details.
While some Canadians inarguably
need larger vehicles, many
who buy them don't. As these buyers
weigh their EV options, they'll
have 5,000 reasons to rethink
how big they need to go. - ANC
The auto industry has a new
F-word for Premier Doug Ford
ONTARIO PREMIER DOUG FORD.
Friend of automotive.
Raise your hand if you ever
thought those words would be
written and ring true.
It was only four years ago that
former Unifor President Jerry Dias
exclaimed, " You know, Doug, f--you! "
during a televised speech
in which the fiery union boss was
wound up about General Motors'
decision to wind down production
at Oshawa Assembly, and Ford's
response that " the ship has
already left the dock. "
It wasn't long ago Ford was
being pilloried for pulling the plug
on the province's electric-vehicle
rebate.
PUBLISHED MONTHLY BY CRAIN COMMUNICATIONS, INC.
JEFF MELNYCHUK, EDITOR-IN-CHIEF, 506.866.8236, Jeff.Melnychuk@autonews.com
GRACE MACALUSO, MANAGING EDITOR, 226.787.0441, Grace.Macaluso@autonews.com
GREG LAYSON, DIGITAL AND MOBILE EDITOR, 519.567.8877, Greg.Layson@autonews.com
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416.560.7663, tim.dimopoulos@autonews.com
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KEITH E. CRAIN, EDITOR EMERITUS
KC CRAIN, GROUP PUBLISHER
CHRISSY TAYLOR, VICE-PRESIDENT EDITORIAL OPERATIONS, AUTOMOTIVE NEWS GROUP
Doug Ford was
once considered
a foe to the
auto industry,
but his actions
have proved the
exact opposite.
But my
how the
tables have
turned. Dias
- before he
retired in the
midst of a
scandal -
later joined
the Premier's
Council on
U.S. Trade
and Industry Competitiveness.
Strange bedfellows, indeed.
And then in March, Ford
began handing automakers
money as if he owed it to them.
First, $131.6 million to back
Honda's $1.4-billion retooling of
its Ontario factories.
Then, an undisclosed amount
DIGITAL AND
MOBILE EDITOR
GREG
LAYSON
- likely $500 million - to
Stellantis and LG Energy
Solution, which together will build
a $5-billion EV battery factory in
Windsor, Ont. An NDP and Liberal
stronghold, by the way.
Ford followed that
with a $259-million contribution
to GM so it can
retool plants, add a shift
and upgrade R&D in
Ontario.
Oh, and did I mention
that in 2020 he pledged
$250 million to help
Ford Motor Co. retool its
Oakville Assembly Plant
to build EVs?
is expected to reduce the administrative
burden and save costs
and time.
The Trillium Automobile
Dealers Association (TADA),
which represents more than
1,000 franchised new-vehicle
dealerships, called the program
" the most important policy
announcement made by the
Ontario government in a generation. "
It's
something I called on the
Liberals to enact in this
very space ... five years
ago.
Whether Ford
According to my abacas,
that's $1.14 billion
- with a " B " - in government
money, and
countless jobs.
But Ford didn't stop
there this spring. No, sir.
He launched the
Digital Dealership
Registration (DDR) program,
which allows 7,000 newand
used-vehicle dealers to issue
vehicle registrations and licence
plates directly to customers. That
personally
believes in
electrification,
he seems to
believe in the
economic
benefits of
investing in
a future with
EVs.
FILE PHOTO
And Ford still wasn't
done as of March. The
province is spending
$91 million to help
make EV chargers more
accessible to the public
across the province,
from rest stops to carpool
lots, parks and
hockey rinks.
Ontario will also
introduce the Rural
Connectivity Fund to
provide funding to support
the installation of
EV chargers in rural
municipalities.
Forgive me if I
missed anything, but
maybe that's a good
thing. I only have about 450
words of space, after all.
Ontario Premier Doug Ford.
Friend of automotive. - ANC

Automotive News Canada - April 2022

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