The stakes are huge. Get it wrong — as in, treat our industry policy, as we so often do, as but a necessary evil — and our Canadian auto industry will sputter, along with the 79,000 or so jobs that sustain the roughly two million cars, trucks, and SUVs we used to produce before the pandemic. Get it right, and that number could swell to more than 322,000 high-income, value-adding, tax-paying jobs directly related to the auto industry. Of course, that would require an almost mythical combination of government-business cooperation, a massive reduction in governmental bureaucracy, and a rapidity of innovation we’ve seldom seen in Canadian industry.

Nonetheless, the numbers are astonishing. In the first scenario — the status quo, if you will — the auto industry’s contribution to the GDP is roughly $15 billion. In the more optimistic projection — let’s call that one “all hands on deck” — the auto industry, either directly or indirectly, contributes some $60 billion to Canada’s bottom line. Even those socialists forever decrying big business should rejoice over the possibility. In case one, the governments of the land collect but $2.7 billion in tax revenue. In the best-case scenario, their coffers swell by some11 billion social-policy-fulfilling bucks.

And it all depends on one thing: electrification. Or, more specifically, whether Canada gets off its duff and becomes a part of the electric-vehicle manufacturing revolution that’s sweeping North America.

At least that’s what the Trillium Network for Advance Manufacturing’s Developing Canada’s Electric Vehicle Battery Supply Chain: Quantifying the Economic Impacts and Opportunities report seems to say. And it doesn’t matter if you believe, as our federal government does, that all cars sold in North America by 2035 will be fully battery-electric. Or that, like Motor Mouth, you think there will be a healthy market for hybrids and PHEVs for quite some time.

The one common factor is that the car of the future will be electrified. More importantly, at least to any discussion of the health of the Canadian auto industry, they will all need batteries of some sort, and the auto industry is going to need new supplies of raw materials on an unprecedented level. It’s a transformation that will, as Brendan Sweeney, the managing director of Trillium, says “require a level of government support — and political willpower — that we have not seen since the 1960s.”

That would seem to make François-Philippe Champagne, the Liberal government’s Minister for Innovation, Science, and Innovation — and the man charged with pumping up Canada’s EV manufacturing abilities abroad — the most important person in the Canadian auto industry right now.

And, so far, he’s doing a pretty bang-up job with his mines-to-mobility messaging. According to La Presse, since Champagne took up the portfolio some 22 months ago, at least 10 companies have announced investments to build EVs in Canada, manufacture the batteries that power them here, or extract from our mines the all-important minerals those lithium-ion cells need. Those agreements total, says La Presse, an impressive $15.7 billion.

motor mouth: quarter-million jobs may be at stake for canada’s auto industry

U.S. President Joe Biden delivers remarks during a visit to the Detroit Auto Show in Detroit, Michigan, U.S., September 14, 2022. Photo by Kevin Lamarque /Reuters

There is a fly in the ointment, however. It’s called the Advanced Manufacturing Production Credit. Officially, it’s section 45X of President Biden’s signature Inflation Reduction Act and, without revisiting the entire discussion — Motor Mouth has already covered the IRA extensively — the ultra-protectionist legislation so generously incentivizes locating battery cell plants in the U.S. that it’s hard to imagine Canada getting any new manufacturing facilities in the next 10 years.

How generous, you ask?

Well, if the IRA were enacted as currently written — and, yes, our government, as those of other car-producing countries, is negotiating for changes — the American government would give battery manufacturers US$45 for every kilowatt-hour of lithium-ion cell and module they produce over the next ten years. Only, of course, if said plant is in the United States.

So, just as an example, if Stellantis — which signed its intent to build a battery plant in Windsor before the Inflation Reduction Act was signed — had decided to locate its proposed $5-billion facility in Michigan instead of Ontario, it would be eligible for that US$45/kWh tax credit for every one of the 45 gigawatt-hours of lithium-ion it plans to manufacture annually.

A bit of simple math says that a similar plant, built just south of our border, would recoup up to US$2 billion — each and every year! — from the time the plant is projected to open in 2025 until 2032, thanks to that credit. In a worst-case scenario, if the IRA is enacted as written, it will be an overwhelming dis-incentive to building new cell manufacturing plants here in the Great White Frozen North. At the very least, it’s a serious monkey wrench in the federal government’s mines-to-mobility vertical integration.

motor mouth: quarter-million jobs may be at stake for canada’s auto industry

A battery for Volvo’s XC40 Recharge EV being assembled at Volvo’s plant in Ghent, Belgium Photo by Volvo Cars

So, what does that mean for Canada? Will Canada will be left out of the electrification revolution? Is the Canadian auto industry doomed to irrelevance?

Not quite. As Sweeney tells it, even in his company’s best-case scenario, Trillium didn’t project having more than three major battery plants come to Canada. By comparison, he says we have some 10 major car assembly facilities. So, while it would be fair to say that the possibility of losing battery cell facilities in Canada is not exactly welcome news, what is crucial is keeping those aforementioned car assembly plants humming.

Equally important will be building a component-sourcing economy that goes beyond Canada’s too often decried, but seldom resolved, role as mere exporter of raw materials. For that we need to be processing those raw minerals — and, according to Sweeney’s report, Canada is the only country in the western hemisphere with known reserves of all the minerals necessary to manufacture EV batteries — into the final materials used in building various battery components. If we simply mine nickel from Sudbury, Ontario and then ship it to, say, China (which, by the way currently processes more than 80 per cent of the raw materials used in battery manufacturing globally) then we’re no better off than we are now, exporting the vast majority of Canadian crude to the United States, where it is processed into high-priced gasoline, which they sell back to us at a fantastical markup.

If, however, as Sweeney notes, that Sudburian nickel instead went to GM’s Bécancour, Quebec plant and is processed there into cathode active material, the economic benefit to Canada would be sixfold compared with just “ripping it and shipping it” abroad. That’s more money in local economies, and more jobs that stay here in Canada instead of being sent overseas. Additionally, it may even have positive environmental impacts, says Mark Adams, SNC-Lavalin’s vice-president and global mining market lead, who is convinced that materials processed in Canada are strictly monitored for environmental-friendliness, something, he says, “is not always assured” in other jurisdictions.

The car of the future will be electrified, they will all need batteries of some sort, and the auto industry is going to need new supplies of raw materials on an unprecedented level

Two points would seem obvious in all of this. The first is that the IRA and 45X, as onerous as they may be in discouraging automakers from establishing battery manufacturing plants in our fair country, does not mean we will be shut out of the electric-vehicle business. That is, of course, if we get off our asses and promote the industries we can compete in.

The second is that we very much need to up our game in the mineral processing business. Canada is well-established as a source of raw materials. Indeed, as Motor Mouth has previously recounted, the federal government — Minister Champagne and Prime Minister Justin Trudeau — recently signed agreements with Volkswagen and Mercedes-Benz to fuel their plans to build more EVs.

motor mouth: quarter-million jobs may be at stake for canada’s auto industry

German Chancellor Olaf Scholz (far left) and Canadian Prime Minister Justin Trudeau (2nd from right) stand behind Markus Schaefer (left), member of the Board of Management of Mercedes-Benz Group; and François-Philippe Champagne, Minister of Innovation, Science and Industry of Canada, at the German-Canadian Business Forum as they sign a memorandum of understanding Photo by Mercedes-Benz Canada

But those memorandums of understanding are for raw materials only. For the upcoming transformation from fossil fuel to electric to be meaningful to Canadian industry, we must do more than just trade crude oil for raw lithium. We need to become a part of that rarefied infrastructure that provides the value-added processed products automakers will need going forward. For that, we’re going to need an incredible amount of private investment, a reduction in government bureaucracy, and every little bit that “political willpower” Sweeney talks about.

Author’s Invitation: This discussion of how to become an EV manufacturing superpower is probably the most important discussion the Canadian auto industry has faced in a lifetime. That’s why Driving Into the Future is dedicating an entire panel to discuss what a battery-fueled expansion of our auto industry might look like. If you’re interested in learning more, click here to register for our free DITF panel at 11:00 am, November 30. Along with Trillium’s Brendan Sweeney and SNC-Lavalin’s Mark Adams, we’ll be joined by Scott Mackenzie, director, Corporate & External Affairs, Toyota Canada; and David W. Paterson, vice-president, Corporate & Environmental Affairs, General Motors of Canada.

Keyword: Motor Mouth: Quarter-million jobs may be at stake for Canada’s auto industry

CAR'S NEWS RELATED

Best cars for a 'Love Bug' remake

Tennessee’s Yard Art The Thorndyke Special The Hot Rod The Hippie Van Jim’s Lamborghini Growing up, it’s safe to say my absolute favorite movie was Disney’s “The Love Bug.” As a kid living in a world before Pixar’s “Cars,” it was pretty much the best car movie. I loved ...

View more: Best cars for a 'Love Bug' remake

Audi timing belt tensioner prompts Utah bomb squad visit

An aftermarket timing belt tensioner found in a Salt Lake City apartment prompted a visit from the bomb squad this week after it was mistaken for a potential explosive device. Police partially evacuated the apartment complex in which it was found “out of an abundance of caution” and called ...

View more: Audi timing belt tensioner prompts Utah bomb squad visit

2023 GMC Sierra HD 2500 and 3500 will get more expensive

GMC Sierra HD pickups are about to get more expensive again after recently becoming more expensive, according to GM Authority. In July, GMC and Buick raised the prices on certain vehicles in their lineups anywhere from $975 to $1,675 by making the previously optional OnStar a standard feature. Next ...

View more: 2023 GMC Sierra HD 2500 and 3500 will get more expensive

Our week with EVs: Recapping the diverse collection of electric cars we tested

Mercedes-Benz EQB First Drive Review: Next electric Benz is a little different 2022 Chevy Bolt EV Road Test Review: Time to play EV, gas or airplane 2023 Genesis GV60 Road Test Review: The third of Hyundai Group’s E-GMP EVs is the fastest, but softest It may be hard to ...

View more: Our week with EVs: Recapping the diverse collection of electric cars we tested

Europe car sales lowest since 1996 after 12-month decline

BERLIN – Europe registered the lowest number of new passenger cars in the month of June this year since 1996 at just over 1.06 million vehicles, with some carmakers seeing sales drop by nearly 50%, data from Europe’s automobile association showed on Friday. Volkswagen Group was the hardest-hit major ...

View more: Europe car sales lowest since 1996 after 12-month decline

More Than Just A Carmaker: Toyota Motor PH Launches Toyota Mobility Solutions

Automotive industry leader, Toyota Motor Philippines Corporation (TMP) inaugurated today Toyota Mobility Solutions Philippines, Inc. (TMSPH), a wholly owned subsidiary that will be a provider of mobility-related services. TMSPH ventures into the development and offering of a range of ‘new mobility solutions’ that will enhance Toyota as a brand ...

View more: More Than Just A Carmaker: Toyota Motor PH Launches Toyota Mobility Solutions

'F1 22' feels fast and familiar | Gaming Roundup

‘F1 22’ impressions ‘Construction Simulator’ is launching Sept. 20 Autoblog may receive a share from purchases made via links on this page. Pricing and availability are subject to change. This week in racing game news: ‘F1 22’ impressions At its core, “F1 22,” the latest installment in the F1 ...

View more: 'F1 22' feels fast and familiar | Gaming Roundup

Watch a single-engine plane crash-land on 91 Freeway in California

A single-engine Piper Cherokee airplane was forced to crash land on the 91 Freeway in California after losing power about 45 minutes outside of Los Angeles. Yes, that means this was a very busy highway, practically bursting at the seams with traffic. No, amazingly nobody died, either in the ...

View more: Watch a single-engine plane crash-land on 91 Freeway in California

Ford files 'Mustang Dark Horse' trademark application

Make adventures more comfortable with high-quality Jeep grab handles

New Lucid Air variant to debut & Stealth Look to be on display during Monetary Car Week

Chevy offers incentives to prevent Corvette Z06 flipping

Average U.S. gas price falls below $4/gallon

German court: SUV driver must pay more than a car for running red light

Australian vehicle crash tests to include underwater performance

Toyota C-HR rumored to get revamp next year and an EV version

Geely's electric Zeekr 009 is an EV Alphard we never had; 700 km, 542 PS, top speed 190 km/h

A Newey, Brawn and Anderson row that shows F1 doesn’t change

Sorry, EV buyers, you won't get to pick your own pedestrian safety sounds

There won't be enough copper to meet climate goals, study indicates

OTHER CAR NEWS

;
Breaking thailand news, thai news, thailand news Verified News Story Network