Where did the $590 million go?
On Thursday, automaker Ford announced it was changing its plan to build electric vehicles (EVs) at its plant in Oakville, Ontario and was instead going to spend over $2 billion converting the plant to produce heavy-duty pickups, such as the F250.
The symbolism couldn’t be more perfect.
Not only is Ford not going to build EVs in Oakville (a sign the company may finally have accepted that the future is not all-electric). It is instead going to build about 100,000 of its Super Duty model trucks annually.
Ford is not switching from EVs to some tiny, fuel-sipping, internal-combustion compact like its EcoSport or C-Max which, according to Ford, are designed “for the environmentally conscious family or individual.”
Nope. Ford is going all in on a 3,300-kg (7,300-lb) road warrior that consumes about 12 litres/100 km.
The move is great news for Oakville and nearby Windsor, where the engines are made. Those two cities will see 1,800 new, high-paying jobs beginning next year. That makes Ford’s move very different from rival Stellantis’ announcement that its nearby $15-billion EV battery plant (funded almost entirely with government subsidies and tax breaks) will employ hundreds of Korean and Japanese workers.
Ford’s new hires should all be Canadians.
While governments (especially the federal Liberal government) continue to cling to the eco-fantasy that all new vehicles sold in Canada will be EVs by 2035, Ford’s Oakville change shows just how fallacious the EV mandate is from Prime Minister Justin Trudeau and Environment Minister Steven Guilbeault.
The market has spoken. Canadians don’t want EVs in anywhere near the numbers their governments are demanding.
Indeed, Ottawa is insisting that 20% of all new vehicles be EVs in just over a year. It’s hard to see how that will happen when just over 10% of new vehicles currently produced are EVs.
EV sales are flat-lining while hybrid and internal combustion engine vehicle sales are climbing.
Ford is not stupid. It doesn’t survive if it makes the wrong production choices — if it goes all in for EVs when its customers don’t want them.
Most carmakers have been caught up in EV hype (and the government subsidies and regulations) for the past four or five years. While wealthier consumers bought their EV toys as status symbols, the middle-class market has not followed.
Even with massive injections of taxpayer dollars, Canadian consumers remain rightly skeptical about the practicality and cost of EVs.
The parliamentary budget officer calculated that, in just the past two years, the federal, Ontario and Quebec governments have committed $53 billion to the building of EVs and EV battery plants. That doesn’t include billions in subsidies to consumers to buy EVs and still more billions to build charging stations across the country.
None of that spending changes the fact this is a vast country and, especially in winter, EVs can’t go as far as gasoline-powered vehicles. Nowhere near as far.
And they cost more. And they take longer to “refuel.” They go through tires faster. They’re tougher on road surfaces and parkades because they’re much heavier. And because of their weight, they are more damaging to other vehicles in crashes and thus more expensive to insure.
The federal government’s own estimate is that 25% of Canadians won’t be able to afford vehicles in an all-electric future.
Which brings me back to my initial question: Where did the $590 million go?
I like that Ford has stopped listening to the political hype about EVs and has started listening to customers. However, when the initial conversion of its Oakville plant to EVs was announced in 2020, Ottawa and Ontario agreed to put in $295 million each to pay for the retooling.
As a taxpayer, I want to know what’s going to happen to that money.