Energy Notes From the Edge: EV Industry on Limp-Home Mode; Greenpeace’s Firehose Used Against Them and They’re Not Happy

From the Frontier Centre for Public Policy

Consumers have spoken, auto makers are responding, and the odd man out are governments still paralyzed in 2019 when euphoric and nonsensical “environmental” policy danced on the supposed grave of last century’s fuel.

Summer was pretty quiet, thankfully, but time for a jolt to get reengaged. There’s no better way than getting yelled at, so today let’s talk about a surefire recipe – Electric Vehicles. Those that love EVs really love ‘em, and to speak ill of them in front of the fans is akin to asking questions about the size of their children’s ears.

EVs have an outsized role in the current cultural and economic landscape, in an odd way. They are seen as the best hope to turn the tide of general consumer emissions. Governments threw their full weight behind them to an astonishing degree, legislating them into projected dominance at an unprecedented (and as it turns out, insane) pace.

What makes EVs such a flashpoint is that they intersect with a bunch of stuff that people hold dear. For some, EV ownership feels like a major personal contribution to the global emissions problem, if owning one entails a significant personal commitment. For many, EVs make total sense if only running around town, or if wealthy enough to keep one in the garage amongst the Astons and Ferraris so as to be well-positioned to make an environmental statement if required. Some love them for their simplicity, with few moving parts and lower maintenance requirements (lower, but not zero). Still others love them because they can fuel up at home, at night. And then there is the cohort that feels their rage against oil companies sated cathartically every time they drive past a gas station, those that believe hydrocarbons bring nothing but death, irrespective of the fact that to that point in their life they’ve brought them everything within their purview, including all the things that keep them alive. Have pity on those people, the neutron-level boxing matches going on between their ears are not to be wished on anyone.

On the flip side of the equation, and what brings it to the news, is the public’s general feeling of “meh” towards them, the 80 percent that constitutes the non-extreme middle. In sane times, that is not a problem; major change happens gradually for such big ticket items, and most get a sense that certain segments of the economy work extremely well as EVs – delivery fleet vehicles, forklifts, urban taxis, etc. Many would drift toward EVs as battery technology improves, as range increases, as price falls. But such a shift would be a multi-generational thing, particularly with the infrastructure changes required.

Most consumers can see that that Total And Rapid EV Domination is not a particularly wise vision, even if governments have declared that that must happen within their dog’s lifespan.

Consumers do know a good idea when they see one, and we can see that by the explosion in popularity of hybrid vehicles – those with internal combustion engines augmented by modest battery packs and electric motors that give a certain emissions-free range before switching to gasoline power.

There’s a reason for this growing popularity – it makes sense on many levels. A hybrid removes some of the major reasons people are reluctant to go full-battery EV (BEV) – range anxiety, cold weather performance, etc. – and, as Toyota has wisely pointed out, hybrids are actually better for the environment in general than mass consumer adoption of EVs.

How can that be, you might wonder. Here is Toyota’s calculation, in what they call the 1:6:90 rule. An excellent write up can be found here, and the gist of it is: Because of immense challenges in finding, developing, mining, and processing critical metals and minerals (hundreds of new mines required globally, with each new mine having weaker grades than before, and with many jurisdictions becoming more hostile towards new mines), it makes more sense to utilize a given BEV’s minerals requirements to construct 90 hybrids instead.

Because many trips are very short, a hybrid can run on electric power for most of them, which is how the spreading-out of these minerals to many vehicles makes emissions reduction sense. Toyota calculates that if the metals/minerals used to construct a single EV were instead used to build 90 hybrids, the overall carbon reduction from those hybrids over their lifetimes would be 37 times that of a single EV (and with that sentence, I don my helmet for the incoming shouts of “Fossil Fuel Shill” – the aforementioned yelling).

Customers are clamouring to acquire hybrids. According to a Car Dealership Guy article (excellent auto news site, from a dealer perspective), in August, 48 percent of Toyota sales were hybrids, Hyundai had an 81 percent increase in hybrids (albeit from a relatively smaller number than Toyota), and Ford saw hybrid sales increase by 50 percent.

Volvo, a company that had pledged to be completely EV by 2030 and thereby banishing the smell of gasoline forevermore from customers’ nostrils, recently backed down from that pledge to announced hybrids would remain part of the equation indefinitely. “Everybody made a lot of assumptions two, three, four, five years ago, and that’s changed,” said Volvo’s CEO.

And then there is the Chinese onslaught of affordable, high-quality EVs that somehow policy planners didn’t see coming. Western countries announced bans on ICE in favour of full-EV by the next decade, and lo and behold, China controls most elements of an EV’s composition, and they took full advantage of that supply chain dominance (plus massive government support) to undercut virtually every western EV maker. Hey, you can’t do that, said US, Canadian, and EU governments, slapping huge tariffs on Chinese made EVs because well, we want to save the environment but not that badly (ultra cheap EVs are one of the few catalysts that would accelerate wide spread and rapid EV adoption among the masses).

Not sure where this goes next. Consumers have spoken, auto makers are responding, and the odd man out are governments still paralyzed in 2019 when euphoric and nonsensical “environmental” policy danced on the supposed grave of last century’s fuel. How they backpedal out of this is anyone’s guess, although there are signs, such as this headline: “Italy leads revolt against Europe’s electrical vehicle transition”. If memory serves from Italian traffic, they seem fine with virtually any sort of vehicular madness, so a automotive revolt in that land is a pretty big deal.

As with so, so many aspects of an energy transition, if the whole process had not been hijacked by zealots, we would be farther down the road, we would have consumers on side, we would have entire industries functioning properly instead of the fiascos we in for example the auto industry, and we most likely would have far less emissions.

Greenpeace USA on the ropes

In the big scheme of things, seeing something that has the words “green” and “peace” in the name fail would be disheartening; no sane person is against either the environment or peace. But put those two words together and you have something else entirely.

In the US, Greenpeace is for once holding the crappy end of the stick that they are used to jabbing at everything they disagree with. US energy pipeline giant Energy Transfer is seeking $300 million in damages for Greenpeace’s role in delaying the Dakota Access Pipeline. An ET victory would and should send shockwaves through the massively well financed protest industry that so far employs every tactic in the book to achieve victory (and by ‘victory’ we generally means ‘obstruction’ or ‘vengeance’ as opposed to any sort of constructive advancement). The big ENGOs spend hundreds of millions on staff and lawyers who literally have nothing to do other than bend society to their will without the bothersome hassle of going through the democratic process. Robert Bryce’s excellent Substack column keeps track of the staggering sums that US ENGOs churn through; Greenpeace US is a pipsqueak ($33 million annual engorgement) compared to locust-lawyer Natural Resources Defense Council’s staggering $548 million. With all that money, these groups construct nothing.)

It is a surprise there haven’t been more of these lawsuits filed by thwarted companies and hydrocarbon producers dragged into court for the sin of providing the fuel that keeps us all alive. It’s really not a hard argument to make; the world as we know it will collapse without hydrocarbon production, so shouldn’t thwarting that production on sometimes very flimsy grounds count for something? Shouldn’t blocking fuel from consumers that desperately need it (countless pipeline battles) count for something?

Greenpeace’s defence is pretty funny; suddenly they are insignificant, claiming to have had only a supporting role in the protests, and that the lawsuit is, the funniest part, an “attack on free speech.” Chaining one’s self (or worse, sending some naive acolyte to chain their selves) to a bulldozer on a construction site is, apparently, ‘free speech’, as is law fare and endless slanderous comments about the people and businesses that bring them the fuel that keeps their unhappy lives going.

Maybe the resurrected body, of which you can be certain will appear if this one is bankrupted, should start off with a bit of soul searching. Maybe peace means everyone working together for a common goal, not dramatizing a villain as the means of motivating the troops. Maybe ‘green’ should mean concern for habitat, concern for air pollution, concern for more intelligent use of resources, concern for the most logical global approach to progress, as opposed to a singular war against the bedrock of our society that it is glaringly obvious we cannot and will not live without.

First published here.

Terry Etam is a columnist with the BOE Report, a leading energy industry newsletter based in Calgary. He is the author of The End of Fossil Fuel Insanity. You can watch his Policy on the Frontier session from May 5, 2022 here.

Related Topics:#ElectricVehicles #FrontierCentreForPublicPolicy #TerryEtam EVIndustry feature HybridVehicles

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Nissan, Honda scrap $60B merger talks amid growing tensions

Published on February 6, 2025

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MxM News

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

The Northvolt Crash and What it Says About the State of the Electric Vehicle Market

Published on February 5, 2025

Todayville

From Energy Now

By Jim Warren

Northvolt, a wannabe electric vehicle (EV) battery manufacturing superstar, based in Sweden filed for Chapter 11 bankruptcy protection in the US on November 21, 2024. In just eight years the company had blown through $15 billion USD in startup capital. Bloomberg says it was one of the most indebted companies to file for bankruptcy in the US in 2024.

Northvolt promised to be everything green transition crusaders could hope for in a company. And it isn’t surprising the “whiz kids” in the Prime Minister’s Office and the environment ministry made sure Canada got in on the action. According to Bloomberg, Canada made pledges amounting to $7.3 billion CAD ($5.4 billion USD) in loans, equity stakes and subsidies for Northvolt.

Canada’s investments included support for the construction of four electric vehicle (EV) battery factories—one in B.C., two in Ontario and one in Quebec. As of today, only a cockeyed optimist could believe those four plants will be churning out batteries any time soon, if ever.

Unfortunately, the Northvolt investment represents just 14% of money the federal government has bet on the future of EVs and electric batteries. According to Canada’s Parliamentary Budget Officer (PBO), since 2020 the federal government has invested $52.5 billion in various projects throughout the EV supply chain.

Northvolt was supposed to be a cutting-edge EV battery innovator. It had the cachet of companies claiming to be implementing next-generation technology. When the company was launched in 2016 it was hailed as Europe’s flagship entry into the international race to produce enough non-Chinese batteries to support a widely anticipated boom in electric vehicle demand in Europe and North America.

For eight years Northvolt rode the wave of green propaganda that accompanied government regulations phasing out the production of vehicles with internal combustion engines. The company further endeared itself with environmentalists by claiming it would be at the forefront of development for the mammoth batteries required to back up solar and wind power generation.

The Economist reports that prominent Wall Street players like BlackRock, Goldman Sachs and JPMorgan Chase ditched any aversion they might have had for getting into business with governments. They contributed to the $15 billion in startup money. Governments got on the Northvolt band wagon. Northvolt received $5 billion USD in grants from five countries: Canada, the European Union (EU), Poland, Germany and of course Sweden.

Private investors weren’t deterred by the fact governments had “picked a winner.” They actually liked the fact governments were backing Northvolt. They assumed the governments of wealthy countries dedicated to Net Zero by 2050, would patiently nurse Northvolt through its growing pains and back it financially when setbacks arose. Risks would be minimized—success was as close to guaranteed as anyone could hope to expect.

Governments in Europe as well as Canada had been busy implementing policies designed to reduce CO2 emissions and combat climate change. Building EV batteries dovetailed nicely with those goals. It was a virtuous circle of mutually reinforcing virtue signaling.

Around the same time it was becoming fashionable for businesses to adopt the principles of Environmental, Social and Governance (ESG). “Progressive” investors including union pension funds required companies they invested in to adopt the goals of environmental sustainability, diversity, equity and inclusion—the core missions of ESG.

Some of Europe’s car makers got behind Northvolt. They wanted to see a vertically integrated European EV industry developed to better withstand competition from cheaper Chinese imports. VW, BMW and Scania AB pre-ordered $50 billon USD worth of Northvolt’s products.

By the fall of 2024, Northvolt already had at least one foot planted on a banana peel. But that didn’t prevent 24 lenders including JPMorgan Chase from throwing it a $5 billion USD lifeline. According to The Economist, this was the biggest “green loan,” ever made in Europe. It apparently wasn’t big enough to prevent the company from filing for Chapter 11 protection.

Odd as it seems in hindsight, private sector investors had embraced a project led by politicians, bureaucrats and research scientists with little to no experience in commercializing their lab experiments. The company’s inability to meet the technical challenges of increasing production to the point of commercial viability was one of the reasons it failed. It turns out it is hard to transform next-generation technology from ideas that work in a test tube into something that makes money.

Ironically, it is car makers from China who are best placed to capitalize on Northvolt’s downfall and dominate Europe’s EV and battery markets. Without tariff support European and North American automakers simply won’t be able to compete with the less expensive government-subsidized Chinese made models.

In 2015 the Chinese government launched its ambitious “Made in China 2025” project. Under the program the government has plowed hundreds of billions into industries that combine digital technology and low emissions technologies. The EV sector was one of the program’s big success stories. Last year, BYD a Chinese manufacturer, overtook Tesla to become the world’s biggest EV producer.

This past November The Economist reported, Chinese auto makers already account for two-thirds of global EV production. They had sold 10 million of them in the previous year. Chinese manufacturers also made 70% of the EV batteries produced globally in 2024. Big investments in factory automation in Chinese EV plants have increased per worker productivity, reducing manufacturing costs.

Government subsidies combined with manufacturing know-how succeeded in creating the world’s most significant EV and EV battery manufacturing industries in China but similar efforts in Europe and North America (e.g. Northvolt) are struggling. It is embarrassing to realize China has become the world’s largest manufacturer and exporter. The West has been left in the dust when it comes to making things like solar panels and EVs.

Europe’s car makers are pressing their governments to limit the number of Chinese made EVs sold in Europe. Yet some EU member states like Germany are reluctant to antagonize China by putting tariffs on its EVs—many German manufacturers rely on access to the Chinese market.

EV sales declined by 5% across Europe in 2024 and high prices for European models are one of the factors responsible for declining sales. Allowing cheaper Chinese EVs into Europe tariff-free should improve EV sales making it more likely that governments’ emissions targets are met. But that makes it more likely that some European car makers will struggle to remain profitable. If large numbers of auto workers are laid off in Europe it will signify the breaking of a major promise made by environmentalists and governments. They have consistently assured people the green transition would create more than enough new green jobs, to make up for job losses in high emissions industries.

The bad news for EV champions extends beyond Europe. Donald Trump has signed an executive order killing federal grants to consumers purchasing electric vehicles. Getting rid of the Biden administration’s EV subsidies should give internal combustion engines a new lease on life. You have to wonder how Trump squared that move with Elon Musk. Perhaps Trump’s promise of tariffs on Chinese goods has been enough to satisfy Tesla. It helps that many EV purchasers in the US prefer big luxury models since the Chinese don’t make too many electric Hummers.

Here in Canada, the Liberal government has said it will cease subsidizing EV purchases as of March 31. It looks more and more like the wheels are coming off the Trudeau-Guilbeault environmental legacy.

While the EV markets in Europe and North America are on shaky ground it is unlikely Northvolt will find the investors required for another last minute bailout. That’s good news for people concerned about Canada’s fiscal health–the Liberals won’t be able to blow any more money on Northvolt if it doesn’t exist.