Automotive
Governments in Canada accelerate EV ‘investments’ as automakers reverse course
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From the Fraser Institute
Evidence continues to accrue that many of these “investments,” which are ultimately of course taxpayer funded, are risky ventures indeed.
Even as the much-vaunted electric vehicle (EV) transition slams into stiff headwinds, the Trudeau government and Ontario’s Ford government will pour another $5 billion in subsidies into Honda, which plans to build an EV battery plant and manufacture EVs in Ontario.
This comes on top of a long list of other such “investments” including $15 billion for Stellantis and LG Energy Solution, $13 billion for Volkswagen (with a real cost to Ottawa of $16.3 billion, per the Parliamentary Budget Officer), a combined $4.24 billion (federal/Quebec split) to Northvolt, a Swedish battery maker, and a combined $644 million (federal/Quebec split) to Ford Motor Company to build a cathode manufacturing plant in Quebec.
All this government subsidizing is of course meant to help remake the automobile, with the Trudeau government mandating that 100 per cent of new passenger vehicles and light trucks sold in Canada be zero-emission by 2035. But evidence continues to accrue that many of these “investments,” which are ultimately of course taxpayer funded, are risky ventures indeed.
As the Wall Street Journal notes, Tesla, the biggest EV maker in the United States, has seen its share prices plummet (down 41 per cent this year) as the company struggles to sell its vehicles at the pace of previous years when first-adopters jumped into the EV market. Some would-be EV makers or users are postponing their own EV investments. Ford has killed it’s electric F-150 pickup truck, Hertz is dumping one-third of its fleet of EV rental vehicles, and Swedish EV company Polestar dropped 15 per cent of its global work force while Tesla is cutting 10 per cent of its global staff.
And in the U.S., a much larger potential market for EVs, a recent Gallup poll shows a market turning frosty. The percentage of Americans polled by Gallup who said they’re seriously considering buying an EV has been declining from 12 per cent in 2023 to 9 per cent in 2024. Even more troubling for would-be EV sellers is that only 35 per cent of poll respondents in 2024 said they “might consider” buying an EV in the future. That number is down from 43 per cent in 2023.
Overall, according to Gallup, “less than half of adults, 44 per cent, now say they are either seriously considering or might consider buying an EV in the future, down from 55 per cent in 2023, while the proportion not intending to buy one has increased from 41 per cent to 48 per cent.” In other words, in a future where government wants sellers to only sell EVs, almost half the U.S. public doesn’t want to buy one.
And yet, Canada’s governments are hitting the gas pedal on EVs, putting the hard-earned capital of Canadian taxpayers at significant risk. A smart government would have its finger in the wind and would slow down when faced with road bumps. It might even reset its GPS and change the course of its 2035 EV mandate for vehicles few motorists want to buy.
Author:
Automotive
Nissan, Honda scrap $60B merger talks amid growing tensions
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Quick Hit:
Nissan is reportedly abandoning merger talks with Honda, scrapping a $60 billion deal that would have created the world’s third-largest automaker. The collapse raises questions about Nissan’s turnaround strategy as it faces challenges from electric vehicle competitors and potential U.S. tariffs.
Key Details:
- Nissan shares dropped over 4% following the news, while Honda’s stock surged more than 8%, signaling investor relief.
- Honda reportedly proposed making Nissan a subsidiary, a move Nissan rejected as it was initially framed as a merger of equals.
- Nissan is struggling with financial challenges and the transition to EVs, still reeling from the 2018 scandal involving former chairman Carlos Ghosn.
Diving Deeper:
Merger talks between Nissan and Honda have collapsed, according to sources, after months of negotiations to form an auto giant capable of competing with Chinese EV makers like BYD. The proposed deal, valued at over $60 billion, would have created the world’s third-largest automaker. However, differences in strategy and control ultimately derailed the discussions.
Reports indicate that Honda, Japan’s second-largest automaker, wanted Nissan to become a subsidiary rather than an equal merger partner. Nissan balked at the idea, leading to the collapse of negotiations. Honda’s market valuation of approximately $51.9 billion dwarfs Nissan’s, which may have fueled concerns about control. The failure of talks sent Nissan’s stock tumbling more than 4% in Tokyo, while Honda’s shares rose over 8%, reflecting investor confidence in Honda’s independent strategy.
Nissan, already in the midst of a turnaround plan involving 9,000 job cuts and a 20% reduction in global capacity, now faces mounting pressure to restructure on its own. Analysts warn that the failed merger raises uncertainty about Nissan’s ability to compete in an industry rapidly shifting toward EVs. “Investors may get concerned about Nissan’s future [and] turnaround,” Morningstar analyst Vincent Sun said.
Complicating matters further, Nissan faces heightened risks from U.S. tariffs under President Donald Trump’s trade policies. Potential tariffs on vehicles manufactured in Mexico could hit Nissan harder than competitors like Honda and Toyota. The stalled deal also impacts Nissan’s existing alliance with Renault, which had expressed openness to the merger. Renault holds a 36% stake in Nissan, including 18.7% through a French trust.
While both Nissan and Honda have stated they will finalize a direction by mid-February, the collapse of this deal signals deep divisions in Japan’s auto industry. With Nissan’s financial struggles and the growing dominance of Chinese EV makers, the company must now navigate an increasingly challenging market without external support.
Automotive
Trudeau must repeal the EV mandate
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Last Monday, Transport Canada released a bombshell statement, announcing that the Trudeau government’s program granting a $5,000 rebate to Canadians purchasing an Electric Vehicle (EV) had run out of money and would be discontinued, “effective immediately.” This followed a prior announcement from the government of Quebec that they would be suspending their own subsidy, which had amounted to $7,000 per EV purchased.
This is, of course, a game changer for an industry which the Trudeau government (as well as the Ford government in Ontario) has invested billions of taxpayer dollars in. That’s because, no matter the country, the EV industry is utterly dependent upon a system of carrots and sticks from the government, in the form of subsidies and mandates.
EVs have remained notably more expensive than traditional Internal Combustion Engine (ICE) vehicles, even with those government incentive programs. Without them the purchase of EVs becomes impossible for all but the wealthiest Canadians.
Which is fine. Let the rich people have their toys, if they want them. Though if they justify the expense by saying that they’re saving the planet by it, I may be tempted to deflate them a bit by pointing out that EVs are in no way appreciably better for the environment than ICE vehicles, how all the lithium, nickel, cobalt, manganese, aluminum, copper, etc, contained in just one single EV battery requires displacing about 500,000 lbs of earth. Mining these materials often takes place in poorer countries with substandard environmental regulations.
Moreover, the weight of those batteries means that EVs burn through tires more quickly than gas-and-diesel driven vehicles, and wear down roads faster as well, which among other issues leads to an increase in particulate matter in the air, what in the old days we referred to as “pollution.”
That is a potential issue, but one that is mitigated by the fact that EVs make up a small minority of cars on the road. Regular people have proved unwilling to drive them, and that will be even more true now that the consumer subsidies have disappeared.
Of course, it will be an issue if the Trudeau Liberals get their way. You see, Electric Vehicles are one of the main arenas in their ongoing battle with reality. And so even with the end of their consumer subsidies, they remain committed to their mandates requiring every new vehicle purchased in Canada to be electric by 2035, now just a decade away!
They’ve done away with the carrots, and they’re hoping to keep this plan moving with sticks alone.
This is, in a word, madness.
As I’ve said before, the Electric Vehicle mandate is a terrible policy, and one which should be repealed immediately. Canada is about the worst place to attempt this particular experiment with social engineering. It is famously cold, and EVs are famously bad in the cold, charging much slower in frigid temperatures and struggling to hold a charge. Which itself is a major issue, because our country is also enormous and spread out, meaning that most Canadians have to do a great deal of driving to get from “Point A” to “Point B.”
Canada is sorely lacking in the infrastructure which would be required to keep EVs on the road. We currently have less than 30,000 public charging stations nationwide, which is more than 400,000 short of Natural Resources Canada’s projection of what we will need to support the mandated total EV transition.
Our electrical grid is already stressed, without the addition of tens of millions of battery powered vehicles being plugged in every night over a very short time. And of course, irony of ironies, this transition is supposed to take place while our activist government is pushing us on to less reliable energy sources, like wind and solar!
Plus, as I’ve pointed out before, the economic case for EVs, such as it was, has been completely upended by the recent U.S. election. Donald Trump’s victory means that our neighbors to the south are in no immediate danger of being forced to ditch gas-and-diesel driven cars. Consequently, the pitch by the Trudeau and Ford governments that Canada was putting itself at the center of an evolving auto market has fallen flat. In reality, they’ve shackled us to a corpse.
So on behalf of my fellow Canadians I say, “Thank you,” to the government for no longer burning our tax dollars on this particular subsidy. But that isn’t even half the battle. It must be followed through with an even bigger next step.
They must repeal the EV mandate.
Dan McTeague is President of Canadians for Affordable Energy.
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