Automotive
Canada should heed Germany’s destructive climate policies

From the Fraser Institute
By Kenneth P. Green
Volkswagen may soon close three vehicle factories, cut 10,000 jobs and impose steep across-the-board pay reductions. Volkswagen has avoided involuntary layoffs for 30 years and hasn’t shuttered a factory in its home country in its 87-year history.
According to a recent report in the Wall Street Journal (WSJ), Germany’s climate policies—chasing after “net-zero” greenhouse gas emissions, aggressive electric vehicle sales mandates, and moving electricity production away from fossil fuels to renewable sources such as wind and solar—has imperiled Germany’s massive auto-sector, the central pillar of its economy.
Specifically, Volkswagen may soon close three vehicle factories, cut 10,000 jobs and impose steep across-the-board pay reductions. Volkswagen has avoided involuntary layoffs for 30 years and hasn’t shuttered a factory in its home country in its 87-year history.
While politicians in Germany blame this downturn to poor management of the company, the WSJ blames Germany’s climate policies, which are largely mimicked by Canada. “Germany’s auto industry is trapped in a vise between higher energy prices that drive up the cost of production, and electric-vehicle mandates that drive down sales.” Due to Germany’s intensive switch from coal and nuclear electricity production to renewables, electricity prices for large industrial users in Germany are well above the European Union average, and above prices in the United States, China and Japan.
Then there’s Germany’s electric vehicle (EV) mandates. As with Canada, Germany (under EU policy), requires that EVs constitute a higher share of vehicle sales each year, with internal-combustion engines phased out by 2035. The WSJ reports: “Stellantis has warned that it may also scale back car production to avoid running afoul of the Brussels EV mandate, and Ford is cutting several thousand jobs in Europe in its shift to EVs.” Germany’s climate policies are the “worst act of economic masochism in the West since the 1930s.” And it’s an act that Canada’s government seeks to emulate, with its own “net-zero” emission policies, clean electricity regulations and EV mandates.
Like Germany, Canada’s drive to “decarbonize” the electricity sector has led to higher prices for industrial users. For example, when Ontario decarbonized its electricity sector (by shuttering coal-fired power generation) from 2008 to 2016, Ontario’s residential electricity costs shot up by 71 per cent, far outpacing the 34 per cent average growth in electricity prices across Canada. The skyrocketing electricity rates also hit the province’s industrial sector. Between 2010 and 2016, large industrial users in Toronto and Ottawa experienced cost spikes of 53 per cent and 46 per cent, respectively, compared to 14 per cent (on average) for the rest of Canada. In 2016, large industrial users in Toronto paid almost three times more than consumers in Montreal and Calgary and almost twice the prices paid by large consumers in Vancouver.
And like Germany, Canada’s EV mandate is already showing painful signs of failure. As reported by CBC, back in April Ford announced that its EV unit lost US$1.3 billion in the first quarter of 2024 alone, selling only 10,000 vehicles in that period. Possibly a good thing, because Ford lost about US$132,000 for every EV it sold in the first three months of the year. Ford and General Motors, are cutting back on EV production, with Ford planning to cut its electric pickup production by half.
Germany’s self-inflicted harms from its great spasm of climate policy masochism, like Canada’s self-inflicted harms from its masochism mimicry, should prompt Canada’s politicians to take a deep breath and shift away from economically destructive climate policies such as net-zero and EV mandates.
Automotive
New federal government should pull the plug on Canada’s EV revolution

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.
Automotive
Major automakers push congress to block California’s 2035 EV mandate

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:
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Automakers argue California’s rules will raise prices and limit consumer choices, especially amid high tariffs on auto imports.
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The House is set to vote this week on repealing the EPA waiver that greenlit California’s mandate.
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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?
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