Automotive News Canada - May 2022 - 10

10
05.22
OPINION
Could changing
politics derail ZEVs?
BILLIONS OF DOLLARS IN
automaker commitments to build
zero-emission vehicles? Check.
ZEV rebates for consumers in
place? Pretty much.
ZEVs will
likely be too
ingrained
for any
government
party to
whimsically
change
directions.
A political landscape that favours
ZEVs long term? Check . . . but
maybe use a pencil instead of a pen.
When the Donald Trump administration
came to power in the United
States and rolled back Obama-era
fuel-economy targets, we saw firsthand
how the political winds of
change could impact
the auto industry, and
society.
It's important to
remember that the drive
for zero-emission vehicles
is mostly coming
from government and
not consumers. It's true
that companies such as
General Motors have
announced the intent to
end production of internal-combustion
vehicles,
but you'll notice
that happened once Joe Biden was in
the White House. The political winds
had again shifted.
Will they blow a different way in a
couple of years? And what will the
impact be?
The industry - and the rest of the
world - will likely be so far down the
ZEV road that it might not matter
who's in office in the United States or
Canada.
A microcosm of this: the political
platforms of the June 2 Ontario election.
The four main parties stress ZEVs
as part of their auto policies. They
support the cause differently, of
course, but none is suggesting a rollback
of current policy.
One concern: Premier Doug Ford is
not in favour of rebates for consumers,
which suggests that while he likes
the billions in automaker investments
landing in the province, he's not necessarily
on the side of environmental
concerns to the extent he's prepared
to help fund ZEV adoption. In fact, he
cancelled rebates in 2018 after taking
office.
According to information provider
IHS Markit, new ZEV registrations in
Ontario in 2021 were just 3.3 per
cent of total registrations. The national
average was 5.6 per cent. British
Columbia led with 13 per cent, and
EDITOR-IN-CHIEF
JEFF
MELNYCHUK
Quebec was second at 9.5 per cent.
Both provinces have rebate programs,
although Quebec provides more cash.
Should Ford have aspirations of
national politics, which might be the
most logical path for the Conservatives
to return to power, federally, would he
derail the current federal rebates like
he did Ontario's?
Again, it's possible the ZEV tide
would be too difficult to swim against
and, remember, ZEV mandates are
the federal government's idea, and it
bears the lion's share of responsibility
to help consumers make the switch.
Moreover, what's the point of government
funding the machine that builds
ZEVs if they're not sold in sufficient
volume to reach the mandates?
So, if I were Stellantis with a $3.6
billion investment for its holdings in
Canada (see Page 1), you can be
sure I would be looking for a guarantee
of rebates to help move my product
to create the cash flow to build
the vehicles. I think that would be a
completely fair condition. Not that that
happened, but you get the point.
Consumers have a choice, and at
the moment, ZEVs are just too expensive,
and most people couldn't get
one anyway. I'm hearing two years for
a Kia EV6 or Hyundai Ioniq 5. Really,
for all the hype surrounding electric
vehicles and the amount of ink we
devote to them, there's little selection.
Government mandates can't be
met solely on the backs of the Nissan
Leaf, the Chevrolet Bolt, the Tesla
Model 3 and the handful of others.
There needs to be much more product,
which is being addressed with
investments such as the $3.6 billion
by Stellantis - and the previous
announcement of $5 billion for a battery
plant in Windsor, Ont. - and the
millions and billions by other automakers
in Canada, such as GM, Ford,
Honda and Toyota.
It's going to take time to sort it all
out, but hopefully there's enough
time, just in case the political winds
change. - ANC
" The current mood of the city
can be summed up by saying only
the most ardent cynics are not
buoyed by the announcements.
" This area is on fire. "
For community stakeholders,
Windsor is on
the verge of
forging a path
built on
possibilities
instead of
potholes.
Windsor is on the verge of forging a new path built
on limitless possibilities instead of one riddled with
the potholes of boom-and-bust economies.
Over the past two months,
Stellantis has pledged to spend
$8.6 billion, most of it in the city
that is home to its Canadian
headquarters and minivan
assembly plant.
On March 23, the automaker
announced that it, along with LG
Energy Solution, would build a
$5-billion battery plant in the
city's eastern edge - the first
large-scale cell factory in
Canada. Then on May 2, Stellantis outlined plans to
retool both its Windsor and Brampton assembly
plants, transforming them into " flexible, multienergy
... facilities ready to produce the electric vehicles of
the future. "
Both plants, which currently run on two shifts, will
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With Stellantis EV investments,
Windsor shifts to wow from woe
LONG WRITTEN OFF AS CANADA'S RUST BOWL,
the city of Windsor, Ont., is suddenly sporting a shiny
new coat, thanks to a pair of multibillion-dollar
investments in its automotive future.
" It's huge on top of huge, " says Rhys Trenhaile, a
Windsor real estate agent and developer whose
keen insights into municipal issues
are frequently quoted by local
media.
MACALUSO
MANAGING EDITOR
GRACE
eventually move to three-shift operations, the company
said.
For Windsor, which hosts one of the largest tool,
die and mold clusters in North America, an additional
shift will translate into thousands of jobs, said
Trenhaile. " All those companies have to retool. "
Stellantis also aims to build a
local battery R&D lab that has the
potential to put the city, which
shares a border with Detroit, on the
international stage of EV development.
Two
" Electric Vehicle and Battery
Pack Testing Centres of
Competency will
serve the company's worldwide
needs for technology, process and
product development, " the automaker
said. The centres are
expected to create 650 jobs, mainly
software and design engineers.
" These are all skilled, high-income
jobs and will have a massive,
ripple effect throughout the community, "
said Trenhaile. " Let's say
they buy 500 properties; you're
looking at hundreds of millions of
dollars in real estate acquisitions. "
The city and its economy will be
transformed. Stellantis' investments
will facilitate Windsor's transition
from a blue-collar auto town
that's susceptible to cyclical highs
and lows to a high-tech powerhouse leading the
industry's shift from internal-combustion engines to
zero-emission powertrains. - ANC
SUPPLIED
PHOTO
Trenhaile:
Windsor
" is on fire, "
thanks to
Stellantis'
investments
in EVs and
the battery
supply chain.
What's good for the economy
can be good for the environment
I COULDN'T HELP BUT NOTICE
the podium Prime Minister Justin
Trudeau and Ontario Premier
Doug Ford shared with Stellantis
North America COO Mark Stewart
to announce a further $3.6 billion
in Canadian automotive investment
on May 2.
" Clean air and good jobs, " it
read.
Beneath " clean air " was the
Government of Canada logo, and
below " good jobs " there was the
Government of Ontario logo. How
perfectly fitting.
What we witnessed while
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The federal
and Ontario
governments
worked together
for different
causes but the
same result.
automakers
spent the
spring
announcing
billions for
auto investment
- $13
billion over an
eight-week
span, to be
precise -
was the
strangest of bedfellows working
together and getting exactly what
it is they both wanted.
Trudeau and his Liberals got
the coveted " greening " of the
auto industry they have been after
for years, in an effort to meet their
climate goals. And over his term,
Ford gets to say he helped create
or maintain jobs at no fewer than
seven assembly plants operated
by five automakers.
DIGITAL AND
MOBILE EDITOR
GREG
LAYSON
It's obvious the two leaders
view the auto sector through different
lenses; the federal Liberals
see it as a dirty polluter and necessary
evil to keep
people employed.
Ontario's
Conservatives know
the industry represents
a deep pool
of well-paid voters,
who, if kept happy,
might cast a ballot in
Ford's favour come
June 2 and send
him back to a
majority.
Neither is necessarily
wrong. Or
right.
But taken together,
they represent
the best of both
where. The Liberals would continue
to fall short on their pledge to
slow climate change. And the
Conservatives would be held
(somewhat) responsible for the
loss of investment poised to keep
Canada's auto sector healthy and
stable for another 100 years.
Consider Windsor as just one
example.
Prime Minister Justin
Trudeau, pictured,
gets closer to his
carbon reduction
targets, while Ontario
Premier Doug Ford
gets to create jobs.
PHOTO: GREG LAYSON
worlds. Neither can say " no " to
potential investment as the
industry races toward electrification.
Failing
to work together and
offer automakers incentives in the
billions of dollars would be detrimental
to both causes.
Automakers would look elseStellantis
has promised the
return of the third shift at its minivan
plant there,
which is about
1,500 jobs. It will
build an EV battery
plant that will
employ about
2,500 people. And
it will hire 650
white-collar workers
at new EV research
centres in the city.
That's 4,650 jobs
that don't exist as I
write this column.
And, at an annual
wage of $50,000
- just for round
numbers' sake -
that's $232 million
ripe for spending in a city of
235,000 people. Per year.
That translates to more houses,
boats, date nights, youth
sports registrations and charitable
donations.
Everybody wins. Not just the
politicians, automakers and their
employees. Everybody. - ANC

Automotive News Canada - May 2022

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