Feds say taxpayers must 'rally around' slumping electric automaker

Swedish electric battery maker Northvolt attributed its decision to cut 1,600 jobs abroad to 'headwinds in the automotive market.' Industry Minister François-Philippe Champagne showed no concern for the billions of taxpayer dollars already spent on electric car subsidies.

Feds say taxpayers must 'rally around' slumping electric automaker
The Canadian Press / Adrian Wyld
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A Trudeau cabinet minister responsible for billions in electric auto handouts says taxpayers must “rally around” a battery maker amid sweeping job cuts. Northvolt, a subsidized Swedish electric auto battery maker, confirmed 1,600 job cuts at plants abroad. 

“We have to rally around them and help them,” Industry Minister François-Philippe Champagne told reporters Monday. “I hope we all want them to be successful.”

Northvolt management blamed “head winds in the automotive market” for the job cuts, reported Blacklock’s Reporter. “Are you worried about the project in Canada?” asked a reporter. “It concerns Sweden,” replied Champagne. 

“What’s important is we managed to get Québec into the automobile industry,” he said. “That’s the big gain. Now are you telling me there can’t be adjustments? You’re going from a technology that we’ve been doing for 100 years and now we’re looking at the next 100 years.”

“I often tell people, listen, when you talk to managers, to investors, they see this under a timeline of 10, 20, 30, 50 years,” Champagne continued. “I say to myself we should not be surprised that from the beginning we have jolts like this because, remember, it took Tesla 17 years before it was profitable.”

Umicore, another EV auto manufacturer, halted construction on a Kingston, Ontario EV battery plant over the summer, citing declining demand in Canada.

EV growth projections face a "significant slowdown" moving forward, according to a report published in June. Statistics Canada says purchases plateaued in the third quarter of 2023.

“In the first quarter of 2024 electric vehicle sales were responsible for 11.3% of total vehicle sales in Canada,” said Brian Kingston, CEO of the Canadian Vehicle Manufacturers’ Association. The federal EV mandate prohibits new sales of gasoline or diesel-powered passenger vehicles by 2035.

Consumer demand for EVs will rise when they are more affordable, according to one auto executive. The average price of a new vehicle in Canada ($66,000) is cheaper than the typical electric vehicle ($73,000). 

“If these cars were affordable, you wouldn’t need a mandate,” Conservative Leader Pierre Poilievre said in a December 19 interview with 640 Toronto’sOn Point With Alex Pierson.” The official opposition intends to repeal the mandate if elected.

“The working-class guy who needs a pick-up truck,” Poilievre said, “is going to be forced to pay $20,000 or $30,000 more for an electric version that may or may not work in cold weather and driving long distances.”

Potential EV buyers expressed hesitation as lithium-ion batteries lose upwards of 20% of their range in below-freezing temperatures, according to Recurrent, a Seattle-based startup that assesses EV batteries. 

"Fewer than four in ten indicated they had considered purchasing a zero-emission vehicle, down from 51 percent in 2022," said the report, Canadians’ Awareness, Knowledge And Attitudes Related To Zero Emission Vehicles. Asked, "Have you considered purchasing or leasing a zero-emission vehicle?" only 36% responded yes.

Despite declining consumer interest and market viability for EVs, auto executives recently urged the federal government to fork out billions more in subsidies. Existing handouts total $151.5 billion to date, including $24.5 billion to build charging stations and $52.5 billion for auto and battery manufacturers.

The Prime Minister’s Office (PMO) earlier said the $1.34 billion Northvolt plant would manufacture “the world’s cleanest batteries.” That counters a December 15, 2023 Fisheries briefing note that found the plant may breach the Fisheries Act. 

“The project will include water intake and discharge pipes and will span an area of approximately 171 hectares,” the equivalent of 423 acres, said the briefing note Northvolt Project. “The department has met with Northvolt to discuss the project and our regulatory process under the Fisheries Act for protecting fish and fish habitat,” it said.

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