Ottawa has promised $19 billion to Stellantis to encourage them to build a plant in the Windsor area that will at capacity produce 45 gigawatt hours of batteries, or about enough for 400,000 electric vehicles (EV’s) each year. Stellantis had stopped work on the factory after Ottawa gave Volkswagen $13 billion to build an EV battery plant capable of producing 1 million EV batteries a year. Between these two plants, Canada will have enough battery capacity to support 1.5 million EV’s a year, almost equal to Canada’s annual car sales of approximately 1.7 million vehicles.
But Volkswagen and Stellantis are bit players in the Canadian car market. Ford, Toyota, Honda and Hyundai are the largest players with GM’s Chevrolet and GMC brands close behing. Volkswagen doesn’t make the top seven list with a market share of less than 6% and the Dodge Ram, Stellantis’ best selling vehicle in Canada, sold about 88,000 units.
So where will these EV batteries go? Some will be exported to the U.S. but that country has plans for numerous EV battery plants and may not need imports from Canada unless Stellantis and Volkwagen have enough demand to fill the Canadian plants after filling their U.S. based battery plants. Stellantis sells about 1.8 million vehicles in the U.S. every year, and its CEO says the company will need one or two more North American battery plants in addition to the ones now being built in Canada and in Indiana. There is an outside chance the Canadian plant will reach rated volume, but that will depend on how successful Stellantis is in building vehicles in North America rather than shipping them from Europe. Of course, the company could assemble vehicles in Europe short the battery and ship them to North America where batteries would be installed. Possible, but unlikely in my opinion. Many features of the cars cannot be tested until the battery is installed and it might be awkward to do that work in two different sites.
Volkswagen’s annual U.S. sales of just over 300,000 vehicles won’t fill out a plant capable of producing 1 million EV batteries, and VW has little North American assembly capacity outside of its Chatanooga EV plant which produces about 120,000 units a year. VW also has U.S. battery plants in its sights. In total, VW’s plans foresee North American sales of about 600,000 vehicles, not enough to fill out the Canadian plant let alone its proposed sister plant in the U.S.
Car assembly is brutally competitive and estimates of market shares a few years out unreliable. Driven by generous incentives by U.S. and Canadian governments, VW and Stellantis are making bold moves to establish capacity well ahead of any significant improvement in demand for their brands. Canada is likely to have paid subsidies about equal to the GDP of Newfoundland and Labrador for plants they hope will create 8,000 jobs. These handouts qualify as evidence of the abject stupidity of the Trudeau government and the incompetence of its Minister Champagne.
North American car production averages about 17 million vehicles a year. It is unlikely that Stellantis or VW will have much success displacing Ford, Toyota, Honda, GM, Hyundai, or any of the luxury brand assemblers like Mercedes, BMW, Lexus, Genesis, or Tesla, so a reasonable expectation is that Canada will never see a measurable return on the $32 billion of grift being paid to two weak competitors and taxpayers will be saddled with ongoing corporate welfare costs to keep the two plants afloat when reality settles in.
This is what you get when you elect a drama teacher as Prime Minister and a journalist as Minister of Finance. Hosed.
From NP:
“Irving Oil and Guilbeault are not getting along.
The minister singled out Irving Oil in a letter urging energy regulators in Atlantic Canada not to let refiners get a price increase July 1, when Clean Fuel Standard rules start coming in. He suggested that refinery margins are fat and healthy, and the company should absorb the cost of compliance, rather than trying to pass it along to consumers.
The company disagrees, and is fighting back. The strategic review will surely propose at least a couple of options that represent a significant economic hit to Atlantic Canada, and New Brunswick in particular.
They could sell the refinery, or close it. They could pivot their business to something else, and move.”
The Liberals are a disaster to Canadian investment, the oxygen of the economy
$32B and not even a guarantee for those 8000 jobs?
Logic says they are more likely to create 3000 or 4000 than 8000.
Hell, logic says that Canadians will continue to buy ICE cars, especially for a whole list of reasons related to cold weather battery performance. EVs are likely to be 2nd cars for short city trips, with ICE preferred (not that the Lib/NDP/WEF Govt. cares what the people want). Data indicates that many EV buyers go back to ICE for a variety of reasons and few women buy EVs once they realize that they will have to recharge and be "at risk" in an unknown (and possibly dangerous) environment for hours to get a recharge in the middle of a trip.
If there are real investigative journalists working for honest news media, I'd hope they'd be "following the money" and/or following the expected election vote benefits to the Liberals.
Have the Conservatives come out against this waste of taxpayer money?
Or are they afraid of opposing another spending boondoggle?
I went to the Party website to see if they had any policy relevant to the repeated subsidies paid to the auto-companies (and others).
-------and I found that they have no list of policies: no description of what they will do and no description of Liberal/NDP boondoggles they would stop.
$32 Billion for only the HOPE of 8,000 jobs?
They could created that many jobs in the Petroleum industry, just by making their policies LESS UNfrendly. $32B could also make a dent in the housing shortage if there was a govt. in Ottawa that was interested in fixing problems created by short-sighted Federal policies. They might save 8000 jobs by cancelling their anti-fertilizer policies.
Why is it that I wonder whether the jobs have to be in Ontario, so the Liberals have a better chance in the next election?
And that this will insure that the Conservatives, also wanting Ontario seats, will not oppose using Canadian's money to pay interest on $32 Billion in unjustified borrowing, lest the Liberals point out that the Cons are Job-Unfriendly?
Perhaps the underlying questions is:
Are Canadians so foolish that they still like to be bribed by Political Parties buying votes with their own excessive tax money... and not smart enough to vote for a RESPONSIBLE GOVT. that uses policy to encourage Canada's existing traditional exports and Canadian, not foreign, entrepreneurs?