Automotive News Canada - September 2024 - 10

10
09.24
OPINION
Is it a bright idea to
make the BrightDrop
switch to Chevrolet?
WHEN GENERAL MOTORS TURNED
off the taps for the Chevrolet Equinox
crossover at its CAMI plant in Ingersoll,
Ont., the next step was a leap into the
unknown.
As soon as the line shut down in
April 2022, a $1 billion retooling
began to usher in the electric era for
the company in
Canada.
It was an audacious
$1 billion
gamble. CAMI would
not just build electric
vehicles, but
commercial electric
vehicles.
EDITOR-IN-CHIEF
JEFF
MELNYCHUK
Commercial electric vehicles without
any history and without a ready-made
market.
With only 55
BrightDrop vans
sold in Canada
in the first half
of 2024, how
many Chevrolet
dealers will be
willing to make
the necessary
investment to
sell and service
such limited
numbers of the
electric vans?
The first BrightDrop van was turned
out just eight months later.
" Canada's EV future is no longer
something that's on the horizon. It's
here, and it's now, " said former GM
Canada President Marissa West during
the official launch
of the retooled
plant in December
2022.
Fast-forward to
2024 and the here
and now is that
only 55 BrightDrop
vans were sold in
Canada in the first
half of the year
(story on Page 1),
and 746 in the
United States. In
the same period,
more than 27,210
Chevrolet Silverados
were sold in
Canada.
Comparing sales
of commercial
vehicles to pickups
isn't exactly apples to apples, but
consider that there are 1,100 van
line workers at CAMI for the 801
BrightDrop vans sold in Canada and
the United States in six months. It's
no wonder that Unifor President Lana
Payne is concerned about her membership.
Contract negotiations are
under way as the current three-year
contract expires Sept. 17.
She might be wondering the same
thing I am: Is BrightDrop going to survive?
Well, not the BrightDrop brand.
BrightDrop vehicles, which are sold
through just four authorized dealerships
in Canada,
will be rebadged for
2025 as the
Chevrolet
BrightDrop 400 and
the 600 (the number
indicates the
cargo space in
cubic feet) and sold
and serviced through the much larger
Chevrolet network.
GM must be expecting big things
since it's adding a second shift to
CAMI (according to Unifor) to boost
vehicle output. The decision is certain
to delight Payne. A further 200 workers
build Ultium battery packs at CAMI
for a total head count of about 1,300.
The Chevrolet plan seems like it has
some legs, or perhaps it's just a case
of it really can't hurt, but every solution
has its challenges. The first is whether
dealers will be enticed to spend the
necessary money and time on service/
sales training, tools and the heavy lifts
needed for the occasional vehicle. For
the costs to make sense, there has to
be some decent volume. Remember,
only 55 were sold in Canada in the
first half of the year. For that reason,
there could still only be a handful of
Chevrolet dealers who sign up.
That brings me to the second
point. The EV market is an absolute
roller coaster ride and automakers,
seemingly daily, are adopting longer
timelines and scaled-back expectations.
It's hard to imagine that
BrightDrop-Chevrolet would be
immune to the same market and economic
pressures.
And that leads me to the third
point. Will making the vans available
through Chevrolet dealerships actually
increase demand for them?
In the current EV climate, that's the
$1 billion dollar question. - ANC
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Mystery math: How did the feds arrive
at 100-per-cent tariffs on China EVs?
CANADA'S TARIFFS TARGETING CHINA-MADE
electric and hybrid vehicles were likely necessary to
protect this country's auto sector, but the inflammatory
move would stand on firmer footing if the federal
government would show its work.
Ottawa cited " nonmarket policies
and practices " that give EVs
built in China an unfair advantage,
thus the new 100-per-cent surtax
that will take effect Oct. 1. But
instead of laying out the specifics
- as the European Union did following
a nine-month investigation
- the Canadian government
DAVID
KENNEDY
Without the feds
providing the
math or the logic
for China tariffs,
it just looks like
a copy of the
U.S. measures.
remains evasive about the finer
points of 30 days of consultations
that ended Aug. 1.
Finance Canada, the ministry
spearheading the tariff
effort, did not directly respond
to my questions about the
sources or data it relied upon
to make its determination, nor
did it provide a breakdown of
how China's EV malpractices
warrant a 100-per-cent tariff.
This is despite there being little
doubt about mammoth state support for China's EV
industry.
In 2015, China launched a 10-year plan to kickstart
the sector. It provided loans to automakers
from state-owned banks and exempts those car
companies from certain regulations.
Among other helping hands, the plan gives tax
breaks to raw-materials producers and battery manufacturers.
Broader
environmental and labour-rights laxity
within China, along with certain countries such as
Indonesia that form integral parts of China's EV battery
supply chain, is also well documented.
But critics rightly point out that Canada has also
put a lot of government money
into its EV supply chain. If the
Canadian tariffs truly aim to level
the playing field, government support
and any nonmarket practices
from China and Canada must be
weighed against each other. The
federal government has provided
no indication it has done this.
TORONTO
BUREAU
CHIEF
And Western countries' vastly different tariff rates
give the federal government more reason to explain
its methodology. Canada's tariffs keep pace with
those planned in the United States, but greatly
exceed tariffs in Europe. Proposed levies on Chinabuilt
EVs shipped to the EU range from nine to 36.3
per cent, corresponding with the amount of state
assistance that individual automakers were found to
receive.
China lodged complaints against EV policies in
the United States and EU earlier this year and didn't
waste any time retaliating against Canada. China
launched an anti-dumping investigation into canola
imports on Sept. 3 and issued a World Trade
Organization challenge to the tariffs on Sept. 6.
The response from China was a foregone conclusion,
but Ottawa should blunt wider skepticism of
the tariffs by breaking down its case in dollars and
cents. Doing so would also allow consumers, who
are likely to bear the financial brunt of the policy, to
see how cheap EVs from China aren't the deal they
appear to be on the surface. - ANC
Trudeau's Liberals right an EV wrong
by hitting China-built EVs and Tesla
The new
tariff plan
addresses
IT'S NOT OFTEN THAT I PRAISE
government automotive policy,
but I have to give credit where it's
due. And Justin Trudeau's federal
Liberal government deserves a
pat on the back for finally acting
- with a 100-per-cent-tariff -
on imported
electric vehicles
built in China,
particularly
Teslas.
It wasn't
a policy of
Canadian
taxpayers
directly
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funding poor
labour and
environmental
practices
in China.
long ago that I
called Chinamade
EVs a
serious threat
of the government's
own
making. That's
because its
ambitious green
policies and
eagerness to
save the planet
- though
Canada makes
up just two per cent of the global
auto market - led Tesla to designate
a Model Y built in lowcost
China to specifically qualify
for the $5,000 Incentives for
Zero-Emission Vehicles (iZEV)
rebate here.
But here's the problem with
that: The federal government collects
our tax dollars and then
doles them out to Tesla, a U.S.
automaker with little to no
Canadian manufacturing footprint.
The company is owned by
DIGITAL AND
MOBILE EDITOR
GREG
LAYSON
an American billionaire who
chooses to build EVs in China,
which happens to be on the list
of the world's worst polluters and
a place where labour laws hardly
exist.
Canadian tax money is essentially
subsidizing cheap labour
and supporting jobs in factories
largely running on coal-fired
power plants. Nearly everything
you just read, from labour laws to
environmental stewardship, are
things the Chinese government
thumbs its nose at.
But Trudeau and the Liberals
have had no problem essentially
offshoring some of our
auto-manufacturing pollution to
China. That is until the United
States and the European Union
announced punishing tariffs on
China-built EVs, even though, in
the case of the United States,
few such vehicles are being
imported.
Canada finally followed suit on
Aug. 26 with a 100-per-cent tariff
on China-built vehicles -
that's in addition to the existing
6.1 per cent - to take effect
Oct. 1. That's stiffer than the
102.5 per cent the United States
plans to implement later this
year.
Canada went one step further
to address Tesla by eliminating
the $5,000 iZEV rebate on qualifying
EVs imported from China.
That's a big deal. As I've previously
written, data obtained by
Automotive News Canada
through an access-to-information
request shows that 77 per cent
of Tesla Model Y vehicles and 55
per cent of Model 3 vehicles
claimed under the iZEV program
last year were built in China. The
remaining percentages were
assembled in the United States.
So maybe my musings aren't
necessarily about praising sound
new automotive policy. Perhaps
it's more about seeing the
Liberals as righting an initial
wrong.
Either way, it deserves to be
acknowledged for what it is:
A good decision. - ANC
Canada is eliminating the
$5,000 iZEV rebate on
qualifying EVs imported from
China. That means the majority
of Model Y's entering the
country. PHOTO: TESLA

Automotive News Canada - September 2024

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