Automotive News Canada - March 2023 - 6

6
* MARCH 2023
Doug Ford is 'dead against'
federal ZEV sales mandate
Ontario premier
sticks to his script
of supporting industry;
Toyota and Honda
say battery-electric
vehicles aren't the
only way to address
climate change
By DAVID KENNEDY
T ORONTO BUREAU CHIEF
OTTAWA'S PROPOSED ZEROemission-vehicle
mandate threatens
to eliminate all the positive momentum
the federal government has
built up in the automotive file over
the past several years in " one clean
swoop, " said Ontario Premier Doug
Ford.
The federal government proposed
its legislation at the end of 2022 and
launched a 75-day consultation
period that was set to end March
16. As drafted, it would require an
increasing percentage of ZEV sales
every year, beginning at 20 per cent
in 2026 and reaching 100 per cent in
2035.
" I am dead against that. It is not
good for the industry, " Ford told
Automotive News Canada in an interview
Feb. 17 on the sidelines of the
Canadian International AutoShow in
Toronto.
" I can't stand when government
dictates to the private sector what to
do. The market dictates all the time,
not the government. As soon as the
government sticks their nose into
something and starts mandating, it
never works out. "
The government's role should be
limited to clearing the way for new
ZEV technology with regulations
and offering incentives for
manufacturers to produce
clean-running vehicles,
Ford said.
ZEV ZIGZAG
That stance is consistent
with the fine line the
Ontario government has
been walking on ZEV policy
since before the COVID19
pandemic.
The province is home to
the majority of Canada's
auto industry, including
assembly plants for five
global automakers. It has
supported those plants'
transitions to ZEV production
with hundreds of millions
of dollars in funding,
typically matching contributions
from Ottawa.
The Ontario government
has also been actively
courting global investors
looking to establish
Hutchinson: Toyota wants
to eliminate emissions, but
" complex problems do not lend
themselves to simple solutions. "
SUPPLIED PHOTO
tional purchase incentives of up to
$7,000 for ZEV buyers.
TIMELINE
The federal
ZEV
government
proposes a
yearly increase
for ZEV sales
Model sales
year target
2026 20%
2027 23%
2028 34%
2029 43%
2030 60%
2031 74%
2032 83%
2033 94%
2034 97%
2035+ 100%
Critics point to the lack of incentives
as one of the key reasons that
Ontario is lagging the provincial
leaders on ZEV adoption.
In the third quarter of 2022, the
most recent period for
which data is available,
ZEVs made up 17.6 per
cent of new vehicles
registered in B.C. and
12.5 per cent in Quebec.
Ontario followed at
7.2 per cent, below the
national average of 8.7
per cent, according to
Statistics Canada.
Quebec and B.C. also
have provincial mandates
requiring automakers
to sell an escalating
percentage of ZEVs over
the next decade.
INDUSTRY BACKLASH
The premier of
Canada's most populous
province is not alone in
pushing back.
Source: Government
of Canada
battery supply-chain operations in
North America. In March 2022, it
helped support a $5-billion investment
in a battery-cell manufacturing
plant planned by Stellantis and LG
Energy Solution.
At the same time, the province
has repeatedly rebuffed calls to
enact a ZEV incentive for consumers
to complement the $5,000 rebate
offered by the federal government.
This is despite a growing number
of provinces - led by Quebec and
British Columbia - offering addiNumerous
industry
leaders - including the
Canadian heads of Toyota
and Honda, which produce
hundreds of thousands of vehicles
in Ontario each year - have
recently criticized the mandate's
aggressive timeline and one-size-fitsall
approach.
" We're not afraid of regulation,
but we are afraid this regulation will
fail and that it will fail with heavy
consequences for the environment,
for the economy and for average
Canadians, " Toyota Canada CEO
Larry Hutchinson told reporters and
company stakeholders Feb. 15.
Toyota is committed to eliminatThe
federal government should enact regulations and offer incentives
to encourage ZEV production, and not impose a sales mandate, said
Ontario Premier Doug Ford, second from left. SUPPLIED PHOTO
ing carbon emissions across its fleet,
Hutchinson said, but " complex problems
do not lend themselves to simple
solutions. "
" We need to use all the tools in
our toolbox. The federal ZEV policy,
as currently drafted, attempts to
address the climate-change challenge
with just one tool: the sale of new
battery-electric vehicles. "
With limited availability of battery
minerals and short-term challenges
to ramping up, Ottawa should
not discount the role of hybrids and
other technologies in cutting carbon
emissions, Hutchinson said.
Honda Canada CEO Jean Marc
Leclerc outlined a similar stance
Feb. 8, warning that the ZEV mandate
would put the country's automotive
sector on a " collision course "
with vehicle buyers, many of whom
are not ready to go electric or cannot
afford ZEVs.
" If customer psychological barriers
are not urgently addressed
- affordability, range anxiety
[and] charging infrastructure -
mass adoption will not be possible, "
Leclerc said at the inaugural
EV Innovation and Technology
Conference in Toronto.
The federal government and supporters
of the ZEV mandate, on the
other hand, say sales requirements
will boost the availability of ZEVs
in Canada and accelerate adoption.
Ultimately, the proposed legislation
aims to put Canada on track to meet
its 2050 emissions-reduction goals.
The federal government has said
it plans to finalize the regulations
this year.
But Ontario, among others, is
pushing to reverse course on the policy.
The province is already talking
with the federal government about
the damage the mandate could do to
the country's auto sector, Ford said.
" They have to change that. Simple
as that. " - ANC
I can't stand
when government
dictates to the
private sector
what to do. The
market dictates all
the time, not the
government. "
Doug Ford
Ontario premier
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ONGOING WEB COVERAGE
THE FLIGHT OF PROJECT ARROW
Now that the Automotive Parts Manufacturers' Association has
revealed its electric vehicle concept - a rolling business card
for the suppliers involved - what's next? The vehicle will tour
auto shows and be showcased for individual automakers.
FGREY ECONOMIC FORECAST
ears of a recession - and rising interest rates - persist. It
could all lead to higher vehicle payments and more incentives from
automakers, provided the inventory picture improves.
LKQ BUYS UNI-SELECT FOR ABOUT $2.8B
CANADA'S LARGEST SUPPLIER OF AUTOMOTIVE AND
industrial paint, Quebec-based Uni-Select, is being purchased by
U.S.-based LKQ Corp. for about $2.8 billion. Uni-Select also has a
distribution network of more than two million aftermarket parts. UniSelect
CEO Brian McManus said the deal will combine the " complementary
strengths " of the companies. LKQ said Uni-Select's
FinishMaster paint division " improves LKQ's scale and product mix
to compete in this attractive and growing segment with minimal
integration risk. " FinishMaster supplies paint and refinishing products
to automotive dealerships, collision repair centres and fleet
operators, mostly in the United States.
ANNUAL VEHICLE OUTPUT IS REBOUNDING
CANADIAN AUTO PRODUCTION ROSE LAST YEAR TO
break a five-year streak of decline, said DesRosiers Automotive
Consultants Inc. Light-vehicle
output rose to 1.24 million
units in 2022, up 12 per cent
from 2021. Vehicle output
had been declining since the
2.36 million units produced in
2016 as automakers cut back
on shifts and closed plants,
and was further impacted by
the COVID-19 pandemic. The
2022 numbers show General
Motors increased Canadian
production by 306 per cent from a year earlier, in part because of
the reopening of Oshawa Assembly.
PHOTO: GENERAL MOTORS
CANADIAN GROUP NOTCHES TEXAS STORE
CALGARY-BASED AUTO RETAILER FOUNDATION
Automotive, fresh off the December acquisition of Humboldt
Chrysler-Dodge-Jeep-Ram in Humboldt, Tenn., has again
expanded in Texas. On Feb. 8, it purchased Crossroads DodgeChrysler-Jeep-Ram
in Libert, northeast of Houston, from Bruce
Glascock, Alfred Flores, Chris Godwin and Marc Wagoner, the
company said. The dealership's name remains, Foundation said.
In 2022, Foundation bought seven dealerships in Texas in three
separate deals.
UTILITY BUYS FORMER GM HEADQUARTERS
CROWN CORPORATION ONTARIO POWER
Generation (OPG) said it has purchased GM
Canada's head office building in Oshawa, Ont.,
and will use it for its own corporate headquarters.
Financial terms of the deal were not immediately
available. OPG said the building will be
retrofitted before it moves in in late 2024. GM
Canada vacated the location at the beginning of the COVID-19
pandemic when it shifted to remote work.
BATTERY RECYCLER GETS U.S. BACKING
THE U.S. DEPARTMENT OF ENERGY SAID IT WILL LEND
US $375 million to Canada's
Li-Cycle Holdings Corp., as it
builds a battery-recycling facility
in New York state. The processing
plant is slated to open later this
year at a cost of about US $485 million. Li-Cycle already has the
funds to build the Rochester plant, so the loan will help the company
expand elsewhere. - ANC
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Automotive News Canada - March 2023

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