I was interviewed by the CBC recently for a story focused on what might seem to be competing goals: On the one hand, protecting domestic automotive manufacturing in Canada; on the other hand, supporting the drive to go green and reduce our reliance on fossil fuels.
To put it more bluntly: Do we need to choose between supporting a green agenda with low-cost Chinese EVs and North American manufacturing jobs? Is there a balance that can be struck — and if so how?
My main goal in the interview was to reframe the discussion. While reducing reliance on fossil fuels and sustaining domestic industries might seem at odds, this is an oversimplification. Positioning it as a choice between those two paths doesn’t make sense.
For many consumers, the transition to electric vehicles (EVs) is hindered by two significant barriers: vehicle price and charging infrastructure. Let’s consider each of those separately.
Introducing cheaper Chinese EVs might seem like a plausible short-term solution to bridge the affordability gap. This poses a significant threat to North American automakers, however, potentially jeopardizing local economies and employment. More importantly, it’s not the only way to address the affordability gap.
Consumer rebates have proven effective in addressing the affordability of EVs, as demonstrated in provinces like Quebec and British Columbia. The stark contrast in EV sales after such incentives were removed in Ontario a few years ago underscores their importance.
So clearly, consumer EV rebates offer a proven and powerful tool to address the affordability gap without endangering the domestic manufacturing base. They can also be throttled back as market conditions and consumer preferences evolve (though I think the Quebec government will be making a mistake in taking their consumer rebate away as they’ve committed to. Too soon, gang. Too soon).
As we know, insufficient charging infrastructure is another critical barrier, one that opening the door to Chinese EVs does nothing to address. This requires concerted government action reminiscent of monumental projects like the development of the U.S. Interstate highway system. A strategic and aggressive rollout of charging stations is essential for driving EV adoption, regardless of the vehicle’s origin.
It’s interesting to me that a follow up question from the CBC asked whether it would implicate federal or provincial governments. It shows me that the scope of what’s required is still not well understood. Clearly, both federal and provincial governments must be part of the infrastructure solution, as should municipal governments.
In the meantime, while the infrastructure for fully electric vehicles is still developing, hybrids and plug-in hybrids present viable immediate solutions for reducing fossil fuel dependency. These vehicles can offer significant reductions in fuel consumption — without the pressing need for extensive charging networks. In many cases, the premium for hybrids over their ICE model counterparts is minimal and with the potential to recover savings quickly. Yet, current federal policies do not fully acknowledge the potential of plug-in hybrids in the energy transition.
When I went from a full ICE vehicle to a plug-in hybrid, my fuel consumption dropped by 85 per cent while my driving pattern didn’t change at all. Extrapolate that across the economy. This path to dramatically reduce GHGs is available right now.
I’m not saying anything here that the industry hasn’t heard before, but it’s a message that still isn’t fully understood outside our industry.
The road to a greener future involves strategic decisions that balance environmental objectives with economic stability and consumer demand. By leveraging consumer incentives, expanding charging infrastructure, and recognizing the role of hybrids, North America can protect its automotive sector while advancing its green agenda.
This dual approach will support domestic manufacturers and ensure a smoother transition for consumers adapting to new technologies. It also protects the return on the EV supply chain investments that have already been made in Canada, including with VW, Stellantis and Honda.
Will Chinese EVs come to Canada? Yes, I believe they will. But it needs to be done with a thoughtful broad-minded approach. We’re not pulling on opposite ends of one piece of string.
