Following the COVID-19 pandemic, governments around the globe will be massively investing in, and defining policies for, economic recovery. With all fossil fuel sectors in decline, what better time to make the transition to a green economy?
And what better time for the federal government to develop an electric vehicle (EV) national strategy?
Canada does have a significant electric vehicle sector, primarily lin Quebec, and the beginnings of an EV segment in the Ontario auto industry. The current Canadian EV sector covers the entire ecosystem, such as EV school buses, trucks, urban transit buses, powertrains, batteries and raw materials, and charging infrastructure. This is backed up by world-class research capabilities.
But the piecemeal, one project at-a-time approach doesn’t make any sense when we are up against 400 electric vehicle technology manufacturers in China. In Quebec, there are 147 EV firms, which collectively employ 6,000 people.
Among the opportunities for Canada are legislative measures taken by China and the European Union, the largest and third- largest vehicle markets, requiring a transition to electric vehicles within a few years. And once global automakers bite the bullet, despite the years to amortize their investments for the most radical change in the industry in a century, the EV technologies wrapped in newly designed vehicle platforms will be available anywhere in the world.
Traditionally, Canada has cloned U.S. initiatives to address vehicle fuel consumption. The rationale for this has been Canada is part of an integrated North American market. Yet, if there is anything we have learned from the COVID-19 crisis, it is that Canada must become more self-reliant.
To be a part of this global EV transition, Canada must look east and west, rather than habitually south. The Canadian EV sector already has ties with China and Europe.
Canada’s EV manufacturing sector
A core player in the Quebec EV sector is Dana TM4. Hydro-Québec holds a 45 per cent stake in the joint venture with Ohio-based Dana . The firm has electric and hybrid drivetrain manufacturing capabilities in Boucherville, where it produces 5,000 EV motors a year, mainly for export to China. It also has a 50/50 joint venture facility in China with Prestolite E-Propulsion Systems, a supplier for trucks and buses for China and members of the Association of Southeast Asian Nations.
A user of TM4 electric direct drive technology is Lion of St-Jérôme, Que., one of the pioneers in the manufacturings of electric school buse. Its buses come with options for ranges of 90, 120 and 150 kilometres. Lion has about 600 suppliers, 25 per cent from Quebec.
As of early 2020, 300 Lion school buses were on the roads. In July 2019, Lion won a California contract for 200 electric school buses to be delivered by 2021. And other big contracts appear to be on the horizon.
"To be a part of this global EV transition, Canada must look east and west, rather than habitually south. The Canadian EV sector already has ties with China and Europe."
Lion Electric is now on the verge of introducing an electric truck, the Lion8, expected sometime in 2020 . In March 2019, the Québec government injected $8.6 million in the firm. The first order is for one pilot vehicle for the Société des alcools du Québec (liquor board), with an option to buy more later on. In the works for the immediate future are Lion8 garbage/recycling trucks in collaboration with Boivin Évolution, fire trucks, tool trucks, giraffe crane models and ambulances. Partners include Demers for the ambulances and Posi-+ Technologies of Victoriaville, the second-largest giraffe crane truck manufacturer in North America. Lion is also collaborating with Fourgons TRANSIT, Systèmes PRAN et MAXIMETAL.
Manufacturers of electric urban transit buses in Canada are Nova Bus, owned by Volvo, and China’s BYD facility, which is in Newmarket, Ont.
As of January, seven three-minute charge with pantographs Nova Bus LFSe+ electric models with up to 600 km of autonomy are being used by the Société de transport de Montréal (STM) on its No. 36 Monk route. The pantographs automatically deploy in the presence of a bus via WiFi. During 2020, the STM will take delivery of four more all-electric Nova Bus vehicles for the Monk route, rendering the route entirely electric. The LFSe+ drivetrain is from Dana TM4.
Supporting the plans of the Montreal, Laval (STL) and Longueuil (RTL) transit authorities, the Quebec government plan originally called for all urban bus purchases to be electric by 2025. But the government of Québec is accelerating the timeline by supporting 95 per cent of the initiativeterminating subsidies for buses running on diesel or gasoline only.
In Ontario, the BYD Newmarket plant announced the delivery of its first two zero-emission, battery-electric buses to the Toronto Transit Commission, part of a total order by the TTC for 10 of its 40-foot K9M buses.
Winnipeg’s New Flyer is a Canadian-owned maker of electric buses, however, there is a caveat. New Flyer’s Xcelsior electric buses are manufactured in Alabama at its Vehicle Innovation Center.
The electric passenger vehicle potential in Canada may lie with Ontario’s Magna International. Magna has entered a joint venture with China’s BAIC to take over Beijing Electric Vehicle Co. Ltd., a subsidiary of BAIC.
The in-between Canadian EV manufacturers are the converters of fossil fuel-powered trucks.
One converter is the Quebec startup Nordresa. The company had the potential to attract truck manufacturers with its turn-key solutions, but could not get any financial support from the Québec or federal governments. The result was that Nordresawas sold in August 2019 to the U.S. firm Dana.
A look at the EV-charging infrastructure in Canada
The largest concentration of charging stations in North America is the Circuit électrique ADDÉnergie stations funded by Hydro-Québec — 2,300 units as of early 2020. Of this number, there are 225 fast-charging stations.
ADDÉnergie of Quebec City manufactures charging stations under the brand name Flo and has its own Flo network. In addition to an extensive Flo network in Quebec, Flo Canadian stations can be found in New Brunswick and British Columbia. In the U.S., Flo will install 100 stations in New York and recently purchased 125 stations in Los Angeles. As of February, Flo operates more than 5,500 commercial stations, including 225 fast-chargers.
Flo’s private chargers sales in 2019 amounted to about 25,000 units.
What’s happening here in EV research
The research and development pillar behind many of the already mentioned stakeholders is the Institut de véhicule innovant (IVI). IVI was involved in the development of the first Lion electric school buses, the Exprolink-Madvac vacuum vehicle, and the Elmec electric robot agriculture vehicle.
The ABB's Excellence in e-mobility centre, a $90-million world headquarters in Montreal, is focused on tailor-made EV infrastructure solutions.
The Hydro-Québec Centre d'excellence en électrification des transports et en stockage d’énergie d’Hydro-Québec has proven to be a global forerunner in battery patents. In February, it signed an agreement with Mercedes to develop solid-state batteries to offer greater range and address battery overheating. The team for this project is made up of 25 researchers in Quebec and Germany.
Battery manufacturing and raw materials
Quebec has a battery manufacturing division of a company from France, Bolloré Blue Solutions.
Completing the battery package, Quebec has all the raw materials for battery manufacturing, lithium, graphite, cobalt and aluminium. But there has yet to be a financially successful firm to exploit the opportunities. Nemaska Lithium is under creditor protection and is restructuring, despite a government of Quebec investment of $130 million for 13 per cent equity. Nouveau Monde Graphite of Saint-Michel-des-Saints has yet to get to the starting point.
A look at Canadian government initiatives
The current Canadian “voluntary targets” for zero emission vehicles is an oxymoron. In the absence of legislation, there is no process in place to verify compliance.
A pillar of existing Canadian EV policy is the Canadian corporate average fuel economy standards (CAFE), which is a copy-and-paste version of the U.S. CAFE. On this, there are several reasons for emulating the EU and China, rather than the U.S.
It is not just a matter that the Trump administration intends to weaken the U.S. CAFE standards conceived under the Obama reign. Nor is it the years of certain legal battles by U.S. states to contest Trump’s proposals. The reality is, relative to the requirements of China and the EU vehicle legislation, the existing U.S. CAFE is just too weak.
The Obama CAFE formula undermines its target for an average fuel economy of 4.2L/100 km by 2025 by having different CAFE targets for each footprint category, footprints based on the distance between the front and rear wheels, with less stringent CAFEs for larger vehicles. With over 70 per cent of U.S. sales being SUVs and light duty trucks, this latter CAFE feature may be regarded as a loophole. Also dreadful, Trump’s CAFE ambitions include reverting back to the previous testing formula, which overestimated “real world” fuel economy, skewing the numbers on fuel economy in favour of the automakers.
In Canada, SUVs and light duty trucks represented 71 per cent of 2019 vehicle sales.
The remaining major component of existing EV initiatives pertains to rebates: the $5,000 federal rebate on vehicles under $55,000, provided the base model is under $45,000; the Quebec rebate of up to $8,000 for an EV and $600 for the installation and purchase of a wall connector (charging unit) for vehicles having a retail price limit of $60,000; and B.C.’s EV rebate of $3,000 for vehicles not over $55,000 and up to $350 for a home wall connector.
For the national and provincial rebate programs, half of the amounts described above apply to plug-in hybrid electric vehicles.
Since EVs are expected to reach purchase price parity around 2022, the rebates are temporary. Subsequently, an EV will be less expensive than a comparably equipped legacy vehicle due to lower maintenance and energy costs.
National Electric Vehicle Strategy: Addressing Recovery and Climate Challenges Concurrently
With road transportation representing approximately 60 per cent of petroleum consumption, it is clear aCanadian national holistic vision is required. This entails the federal government shedding its addictions to fossil fuel industry subsidies and pipelines to serve dead-end markets and focusing on the electrification of transport, in collaboration with both the Quebec and Ontario governments plus the EU and China public and private sectors.
On developing the local EV market, one could start with either the quota concept of China or the strict emission standards of the EU. But the former is probably easier to implement.
From there, there is a whole host of prospects to explore.
Possibilities for collaboration with electric vehicle manufacturers encompass several EV manufacturers in China with ambitions for North America. This contrasts with the U.S. Big 3 for which there appears to be considerable distance between announced plans and actions.
BYD is already present with electric bus and truck manufacturing in California and electric buses in Ontario. The next BYD North American entry phases comprise the BYD e-6 taxis, beginning with Montreal E-Taxi, with a goal of 2,000 units for Quebec by 2022, and eventually the BYD Qin electric passenger vehicle.
China’s NIO is another company that wants in on the North American market. Presently on the Chinese market, the company currently has a seven-passenger electric SUV, the ES8, and a crossover coupe in the Tesla Model Y category, the ES6.
While there are other Chinese EV manufacturers that will go for the North American market, many Chinese automakers will start their foreign activities on the Old Continent because of the existing strict legislation there. They include Chery and Geely, the latter the owner of Volvo.
Canada should also be seizing the moment with European manufacturers. By way of example, the Volkswagen Group has intentions to spend tens of billions to become the No. 1 EV manufacturer globally.
Combined with the above, the Canadian government could look at what China and the EU are doing for ways to strengthen Canada’s battery, raw material, manufacturing and recycling sectors.
In China, all electric vehicle batteries for their market must be manufactured domestically. This has positioned Contemporary Amperex Technology Ltd., or CATL, to be among the select few global players. A German CATL plant will start operations in 2022 and, in line with global expansion plans, CATL has set up subsidiaries in the U.S., Japan and France.
In Germany, government support is anticipated for battery manufacturing.
Completing circular economy considerations, since 95 per cent to 99 per cent of an electric vehicle battery can be recycled, China has issued rules that all battery-powered vehicle manufacturers must be responsible for battery recycling. China is also experimenting with a battery recycling framework.
The European Union has similar requirements.
Finally, there is the option of a timeline for bans on internal combustion vehicles. For Norway, the ban comes into effect in 2025, while for the Netherlands, Denmark and India, the bans apply in 2030.
Canada has many paths to choose from to change its trajectory, simultaneously developing the EV sector in the country, while lowering emissions from road transportation.