Five things to know about Ford’s EV investment in Oakville

OAKVILLE, Ont. — The federal and Ontario governments announced on Oct. 8 they will each spend $250 million to help Ford Canada mass produce electric vehicles in Oakville, Ont. Here’s what you need to know:

1. Is this new money? Ford first announced in September that it would spend $1.95 billion in its Canadian plants, including $1.8 billion toward the production of electric vehicles in Oakville, Ont. over the next decade or so as part of a three-year deal with union workers announced last month.

At the time, news reports suggested that some of the cash would come from government. But until today neither the company, government nor workers’ unions officially broke down the number.

2. Why electric vehicles? Canada has historically lagged other auto exporters when it comes to electric vehicles. In April, the International Council on Clean Transportation noted that Canada produces only one plug-in vehicle model, the Chrysler Pacifica, and that the country’s electric vehicle production is 80% lower than the global average.

Amid competition from plants in the Southern US and Mexico, Canada has been vying to stay competitive in getting new, cutting-edge contracts from the Detroit Three automakers.

3. Why Oakville? The Ontario government is quick to point out that Ontario is the only place in North America where five major automakers build vehicles – Fiat Chrysler, Ford, General Motors, Honda and Toyota – as well as truck manufacturer Hino. As for selecting the Oakville plant, Unifor president Jerry Dias has said that recent union negotiations targeted Ford because the jobs in its Oakville plant were most precarious amid ending vehicle production contracts that, until now, had no replacement.

Ford also already has a connectivity and innovation centre in the Ottawa suburb of Kanata, which has a history as a Canadian innovation cradle.

Canadian companies also have supply chain access to mining companies that produce the nickel and other metals used to make the batteries for electric vehicles.

4. Political will. In addition to pressure from this year’s high-profile labour negotiations, lawmakers have also been looking for ways to promote economic investment in the wake of COVID-19 and an economic downturn. The Sept. 23 speech from the throne highlighted action against climate change as “a cornerstone” of a plan to create a million jobs across the country.

The government has already committed more than $300 million to create a network of fast-charging stations for electric vehicles across the country. And it is providing incentives of up to $5,000 off the price of purchasing or leasing electric and hybrid vehicles.

5. How Canada’s automakers stack up?

Ford is not the only company competing to employ Canadian engineers, as automakers increasingly look toward cutting-edge technology to set themselves apart. Tesla is working with Dalhousie University to produce batteries, while General Motors tests autonomous and electric vehicles in Markham Ont., and is working on doing the same in Oshawa, Ont.

Canadian auto-parts manufacturers Magna International and Linamar have also made investments in high-tech products, and BlackBerry Ltd. has an autonomous vehicle innovation centre in Ottawa.

In the startup scene, Canada Pension Plan Investment Board has invested in an autonomous driving startup, and Quebec City is home to autonomous driving startup LeddarTech.