(Toronto) While many Canadian electric vehicle manufacturers plan to increase their production capacity over the next few years, some are considering building facilities in the United States to protect themselves against protectionist measures.
“There really is a connection between where a product is made and where it is sold. This is especially true for electric vehicles, ”says Joanna Kyriazis, senior advisor at Clean Energy Canada.
“Batteries for electric vehicles are very big. They are heavy, expensive and difficult to transport over long distances. The auto industry’s transition to electric vehicles will see more regional, more local supply chains. ”
Like Mme Kyriazis, several experts advocate even more incentives to convince consumers to turn to electric vehicles.
The manufacturer Lion Électrique, based in Saint-Jérôme, which notably builds electric buses, saw its production increase to 40 vehicles in the last quarter, including 28 for the Canadian market and 12 for the American market.
The company wants to increase its American production by opening a plant in Illinois with an annual production capacity of 20,000 vehicles per year.
A spokesperson for Electric Lion, Patricl Gervais acknowledges that the Buy America program provisions for transport vehicles are motivating factors to build a plant in the United States. He adds, however, that the company wants to be more efficient from an energy point of view.
“We have the policy to build where we sell, because this is compatible with our mission which revolves around the reduction of greenhouse gas emissions,” he explains.
Lion Électrique has also increased the production capacity of its Quebec plant to more than 2,500 vehicles per year. Greater government support means increased domestic production.
“Electrification is a great opportunity for the Canadian economy. We must ensure that everything is in place for the growth of this ecosystem, ”says Mr. Gervais.
Vicinity Motor, a company in Aldergroove, British Columbia, manufactures vehicles in Canada, but is building a plant in Washington State to meet the Buy America program.
Parts suppliers are following the same path. For example, Ontario-based Magna last month announced an agreement to produce battery packs for Ford F-150 electric vehicles in the United States. It has started building a new plant in Michigan that will also manufacture battery enclosures for the electric Hummer GMC.
However, Aurora says it does not produce any parts for electric vehicles in Canada.
Canadian industry is also under threat of a tax credit proposed by US President Joe Bide to promote the production of electric vehicles in the United States. According to the Canadian government, these provisions are the equivalent of a 34% tariff on electric vehicles assembled in the country.
In a letter to senior congressional officials, Deputy Prime Minister Chrystia Freeland and Commerce Minister Mary Ng threatened the United States with retaliatory measures if the United States proceeds with this. case.
According to Matthew Fortier, President and CEO of Accelerate, a coalition of Canadian industry players, Canada must do more to ensure that the entire supply chain and economy will benefit from this growth in demand.
“This is the opportunity for a generation to put in place a strategy in an area where Canada can be very competitive,” says Mr. Fortier
We must act quickly, he adds, because the country has already lost time. Other countries see themselves as serious competitors to produce batteries that allow other elements of the supply chain to take root.
Is Canada Late? Absoutely. We should have had this strategy last year, five years ago. But we are still in the global race in the environment of electric vehicles.
Matthew Fortier, President and CEO of Accelerate, a coalition of Canadian industry players
Signs of progress are on the horizon. Tax measures will come into effect next year. Billions of dollars are planned for the electrification of public transport. The federal government also wants to force car dealers in Canada to sell a certain number of electric vehicles.
Governments have already announced funding for several projects, including $ 590 million to convert Ford’s Oakville plant to electric vehicle production and $ 100 million to Lion Electric for a battery pack assembly plant and research center. .
The players will have to coordinate their efforts more, emphasizes Mr. Fortier.
“The window is wide open. I don’t know when it will close. I know many countries and jurisdictions are trying to take advantage of this right now. ”