Environmental Defence takes on Big Auto's EV lip service

Despite plans to go electric, major auto manufacturers are focused on producing polluting SUVs and pickup trucks in the near term, which has one environmental organization calling for new levels of federal scrutiny.

In a report released Thursday, Environmental Defence found only 3.5 per cent of new vehicles sold in Canada are electric, while a whopping four out of every five are SUVs, pickups, or vans. The group found that over the past decade, increasing SUV sales added an extra 18 million tonnes of carbon emissions over what would have been emitted by standard-sized cars.

It’s no accident larger vehicles are selling more, the group says. The auto industry spends 28 times more on advertising for vehicles with combustion engines than for electric vehicles (EVs), a 2019 Sierra Club study showed.

“It's similar to the tobacco companies, for example, knowing cigarettes cause cancer and ... continuing to sow disinformation and confusion, but ... continuing to bank on selling those things that they know are harmful,” said Keith Brooks, a program director with Environmental Defence.

“We know that oil companies also knew… Exxon has science going back into the ’80s where it knew that climate change was happening and it was contributing to it, and I think that the car companies really are no different,” he said.

Auto manufacturers strive to promote a clean image while selling bigger models because the profit margin on SUVs is far higher than standard-sized vehicles, according to the report. On average, the price of a base model SUV is about $10,000 more than a base model sedan. That also explains why industry revenue rose 2.9 per cent in 2017, even though overall sales were down 2.1 per cent in 2017, Environmental Defence stated.

From their corner offices, the auto executives have indicated to investors that’s the focus, too. On an investor call last month discussing General Motors’ first quarter, CEO Mary Barra boasted of the company’s success in this market segment.

“Despite tight inventories, we maintain a clear lead in the full-size SUV market in the U.S., and our full-size pickups are in high demand. In China, our sales are rebounding sharply with the economy, and Cadillac achieved a record first quarter led by its SUV lineup of XT4, XT5, and XT6,” she said.

“In addition … last November, we said we would return full-size pickup production to Oshawa assembly in Canada in early 2022. Because of the team's speed, we are pulling the start of retail production ahead into the fourth quarter of this year. The new timeline and incremental volume will begin to have a meaningful impact next year as we ramp up production.”

At Ford, it’s a similar story. Putting numbers on it, CFO John Lawler told investors that “after shifting an overwhelming majority of our capital to our franchise strengths, like trucks and utilities, we … shifted our mix to our higher-margin vehicles. And as a result, relative to 2019, the increase in our average transaction prices in the U.S. was $1,900 more per unit than the industry average.”

In the other words, the companies are making money hand over fist by focusing on their SUV and truck sales. Brooks says there’s a clear gap between what these companies are actually doing and how they present themselves.

The Environmental Defence analysis found that over the next five years, GM and Ford are planning to build over five million gas-powered SUVs and trucks, compared to about 320,000 electric vehicles.

Yet the focus is on appearing to be wholeheartedly embracing the switch to electric. GM, for example, changed the “M” in its corporate logo to represent an electric plug in a nod to its planned $27-billion investment in electric and autonomous vehicles through to 2025. Similarly, Ford intends to spend $22 billion by 2025 on electric vehicles, including $1 billion on a manufacturing centre in Germany.

“They're promising all of these electric cars are just around the corner, but their production plans don't reflect that,” said Brooks. “Their production plans reflect a desire to sell a lot of big polluting vehicles and not very many EVs.”

The environmental group is calling on Ottawa to step in to implement a strict national zero-emission vehicle standard, financial incentives to EV buyers, and new taxes on the sale of trucks and SUVs to accelerate a clean transition.

“The extraction of oil and gas and transportation (sectors) together are about half of this country's emissions, and we essentially have very little policy to constrain either of those,” he said.

Brooks said electric vehicles are not a silver bullet, and if the plan to get transportation emissions to zero relied entirely on EVs, there would still be a number of challenges. He said the solution should be multifaceted and include better transit and more walkable communities, but that EVs certainly will play a role, so it’s important to get policy right.

John Woodside / Local Journalism Initiative / Canada's National Observer