Automotive
Canada should get out of EVs before bubble bursts
From the Fraser Institute
A recent article in the The Daily Mail asks, “Is the global EV bubble bursting?” The article then answers the question by looking at electric vehicle (EV) sales figures for six major manufacturers. Sales are down across the industry—Tesla, down 20 per cent in the first quarter this year compared to the same time last year; China’s EV manufacturer, BYD, down 43 per cent; GM down 20.5 per cent; and Volkswagen down 3.3 per cent. Honda saw an anemic uptick of 0.2 per cent. Only BMW experienced a substantial increase in EV sales, up 41 per cent. Not surprisingly, share prices have also dropped across the industry.
An Associated Press article shines more light on EV sales, which in the United States grew only 3.3 per cent in the first quarter of this year, a tiny fraction of the 47 per cent growth that fuelled record sales. The EV share of total U.S. sales fell to 7.15 per cent in the first quarter, down from 7.6 per cent last year. The slowdown, led by Tesla, “confirms automakers’ fears that they moved too quickly to pursue EV buyers.”
In other EV news, Ford has announced it will cut back on EV battery orders, signalling that the company anticipates less EV sales in the future. That would seem to be a good thing for Ford shareholders, as the company also admitted it’s lost $100,000 on every EV it sold in the first quarter of 2024. Ford expects to lose some $5.5 billion from EV sales this year.
So what does it all mean?
Countries that adopted EV sales mandates earlier than Canada are already finding their EV sales targets moving out of reach. In the United Kingdom, which has a 2024 EV sales target of 22 per cent, according to the Society of Motor Manufacturers and Traders, the share of the new car market held by pure battery EVs will be only 19.8 per cent by the end of 2024. The U.K.’s EV sales targets, like Canada’s, require 100 per cent of new vehicle sales to be electric by 2035.
And the rest of Europe is also falling short of EV transition mandates. Forbes reports that current sales of EVs in Europe have flattened at just over 2 million a year, essentially because the continent has run out of early adopters and corporate purchases. Forbes also observes that “other leading market forecasters still expect sales to explode and reach close to 9 million in Europe by 2030,” but that this rate of growth won’t be enough to let the EU and Britain reach target goals of EVs achieving close to an 80 per cent market share.
Meanwhile, the Trudeau government clings to its mandated EV transition, gambling with taxpayer money hand over fist as it pours more than $44 billion into various EV and battery manufacturing operations. And as Andrew Coyne observes in the Globe and Mail, it’s worse than that, as “all of that money will be borrowed, interest costs should also be included. The PBO estimates these at $6.6-billion. All told, that’s $50-billion of other people’s money. For three factories.”
Ottawa’s EV transition policy is deeply misguided, and already shows signs of incipient failure. And likely more failed taxpayer “investments” lie ahead. A smart government would tap the brakes on its EV transition policy. The bubble is growing.
Author:
From the Fraser Institute
During his victory speech Monday night, Prime Minister Mark Carney repeated one of his favourite campaign slogans and vowed to make Canada a “clean energy superpower.” So, Canadians can expect Ottawa to “invest” more taxpayer money in “clean energy” projects including electric vehicles (EVs), the revolutionary transportation technology that’s been ready to replace internal combustion since 1901 yet still requires government subsidies.
It’s a good time for a little historical review. In 2012 south of the border, the Obama administration poured massive subsidies into companies peddling green tech, only to see a vast swath go belly up including Solyndra, would-be maker of advanced solar panels, which failed so spectacularly CNN called the company the “poster child for well-meaning government policy gone bad.”
One might think that such a spectacular failure might have served as a cautionary tale for today’s politicians. But one would be wrong. Even as the EV transition slammed into stiff headwinds, the Trudeau government and Ontario’s Ford government poured $5 billion in subsidies into Honda to build an EV battery plant and manufacture EVs in Ontario. That “investment” came on top of a long list of other “investments” including $15 billion for Stellantis and LG Energy Solution; $13 billion for Volkswagen (or $16.3 billion, per the Parliamentary Budget Officer), a combined $4.24 billion (federal/Quebec split) to Northvolt, a Swedish battery maker, and a combined $644 million (federal/Quebec split) to Ford Motor Company to build a cathode manufacturing plant in Quebec.
How’s all that working out? Not great.
“Projects announced for Canada’s EV supply chain are in various states of operation, and many remain years away from production,” notes automotive/natural resource reporter Gabriel Friedman, writing in the Financial Post. “Of the four multibillion-dollar battery cell manufacturing plants announced for Canada, only one—a joint venture known as NextStar Energy Inc. between South Korea’s LG Energy Solution Ltd. and European automaker Stellantis NV—progressed into even the construction phase.”
In 2023, Volkswagen said it would invest $7 billion by 2030 to build a battery cell manufacturing complex in St. Thomas, Ontario. However, Friedman notes “construction of the VW plant is not scheduled to begin until this spring [2025] and initial cell production will not begin for years.” Or ever, if Donald Trump’s pledge to end U.S. government support for a broad EV transition comes to pass.
In the meantime, other elements of Canada’s “clean tech” future are also in doubt. In December 2024, Saint-Jérome, Que.-based Lion Electric Co., which had received $100 million in provincial and government support to assemble batteries in Canada for electric school buses and trucks, said it would file for bankruptcy in the United States and creditor protection in Canada. And Ford Motor Company last summer scrapped its planned EV assembly plant in Oakville, Ontario—after $640 million in federal and provincial support.
And of course, there’s Canada’s own poster-child-of-clean-tech-subsidy failure, Northvolt. According to the CBC, the Swedish battery manufacturer, with plans to build a $7 billion factory in Quebec, has declared bankruptcy in Sweden, though Northvolt claims that its North American operations are “solvent.” That’s cold comfort to some Quebec policymakers: “We’re going to be losing hundreds of millions of dollars in a bet that our government in Quebec made on a poorly negotiated investment,” said Parti Québécois MNA Pascal Paradis.
Elections often bring about change. If the Carney government wants to change course and avoid more clean-tech calamities, it should pull the plug on the EV revolution and avoid any more electro-boondoggles.
Kenneth P. Green
Senior Fellow, Fraser Institute
MxM News
Quick Hit:
Major automakers are urging Congress to intervene and halt California’s aggressive plan to eliminate gasoline-only vehicles by 2035. With the Biden-era EPA waiver empowering California and 11 other states to enforce the rule, automakers warn of immediate impacts on vehicle availability and consumer choice. The U.S. House is preparing for a critical vote to determine if California’s sweeping environmental mandates will stand.
Key Details:
-
Automakers argue California’s rules will raise prices and limit consumer choices, especially amid high tariffs on auto imports.
-
The House is set to vote this week on repealing the EPA waiver that greenlit California’s mandate.
-
California’s regulations would require 35% of 2026 model year vehicles to be zero-emission, a figure manufacturers say is unrealistic.
Diving Deeper:
The Alliance for Automotive Innovation, representing industry giants such as General Motors, Toyota, Volkswagen, and Hyundai, issued a letter Monday warning Congress about the looming consequences of California’s radical environmental regulations. The automakers stressed that unless Congress acts swiftly, vehicle shipments across the country could be disrupted within months, forcing car companies to artificially limit sales of traditional vehicles to meet electric vehicle quotas.
California’s Air Resources Board rules have already spread to 11 other states—including New York, Massachusetts, and Oregon—together representing roughly 40% of the entire U.S. auto market. Despite repeated concerns from manufacturers, California officials have doubled down, insisting that their measures are essential for meeting lofty greenhouse gas reduction targets and combating smog. However, even some states like Maryland have recognized the impracticality of California’s timeline, opting to delay compliance.
A major legal hurdle complicates the path forward. The Government Accountability Office ruled in March that the EPA waiver issued under former President Joe Biden cannot be revoked under the Congressional Review Act, which requires only a simple Senate majority. This creates uncertainty over whether Congress can truly roll back California’s authority without more complex legislative action.
The House is also gearing up to tackle other elements of California’s environmental regime, including blocking the state from imposing stricter pollution standards on commercial trucks and halting its low-nitrogen oxide emissions regulations for heavy-duty vehicles. These moves reflect growing concerns that California’s progressive regulatory overreach is threatening national commerce and consumer choice.
Under California’s current rules, the state demands that 35% of light-duty vehicles for the 2026 model year be zero-emission, scaling up rapidly to 68% by 2030. Industry experts widely agree that these targets are disconnected from reality, given the current slow pace of electric vehicle adoption among the broader American public, particularly in rural and lower-income areas.
California first unveiled its plan in 2020, aiming to make at least 80% of new cars electric and the remainder plug-in hybrids by 2035. Now, under President Donald Trump’s leadership, the U.S. Transportation Department is working to undo the aggressive fuel economy regulations imposed during former President Joe Biden’s term, offering a much-needed course correction for an auto industry burdened by regulatory overreach.
As Congress debates, the larger question remains: Will America allow one state’s left-wing environmental ideology to dictate terms for the entire country’s auto industry?
New Alberta Election Act bans electronic vote counting machines, lowers threshold for recalls and petitions
Columnist warns Carney Liberals will consider a home equity tax on primary residences
Hours after Liberal election win, Alberta Prosperity Project drumming up interest in referendum
Mark Carney: Our Number-One Alberta Separatist
-
Alberta2 days ago
New Alberta Election Act bans electronic vote counting machines, lowers threshold for recalls and petitions
-
Alberta2 days ago
Hours after Liberal election win, Alberta Prosperity Project drumming up interest in referendum
-
2025 Federal Election19 hours agoNDP Floor Crossers May Give Carney A Majority
-
Alberta2 days agoPremier Danielle Smith responds to election of Liberal government
-
Alberta1 day agoPremier Danielle Smith hints Alberta may begin ‘path’ toward greater autonomy after Mark Carney’s win
-
Banks2 days agoTD Bank Account Closures Expose Chinese Hybrid Warfare Threat
-
Business12 hours agoChina’s economy takes a hit as factories experience sharp decline in orders following Trump tariffs
-
2025 Federal Election2 days agoPost election…the chips fell where they fell