Is Honda’s $15B Ontario EV investment a good idea?

Is this a good investment or a risky gamble? A little bit of both. I mean, the first thing I’ve got to say is a couple of years ago, Minister Champagne, who’s probably in charge of all these negotiations, said he could get a full EV ecosystem into Canada. He could get the mining, he could get the battery production, he could get the cathode production plants, he get EV assembly. Most of us, including myself, didn’t think that was possible and that’s exactly what Honda has announced. That’s fantastic. It’s kudos to him for going above and beyond. That said, it’s an extremely costly proposition. As you said, there’s 5 million taxpayer, a billion taxpayers dollars involved. They’re creating only 1000 new jobs. Yes, there will be ancillary jobs as people indicate, not nearly as many as Doug Ford said he was talking about 28,000 jobs. Most of those are existing. So at you know for $5 billion investment we’re getting a lease with Honda A1, 1000 new jobs and so that’s $5,000,000 a piece And even by all the standards I’ve seen of money being thrown around both South of the border and here that seems like a lot of money. And David, you mentioned those spin off jobs. Doug Ford is projecting about 28,000 of them and says there will also be long term economic benefits. Danielle Benton, President and CEO of Electric Mobility Canada. What’s your take, good investment or no, I think it’s a great investment because of the fact that when you’re thinking about a car manufacturer that is careful, that doesn’t take many risks. Honda is one of them. They are a well respected company. Just the fact that they are saying we are moving to electric, this is a big deal and plus the fact that they’re saying this is just the beginning. So they’re interested in investing more towards new phases and we are talking about jobs for more than a generation potentially. So I spoke to some employees yesterday when I was at the plant and they said this is not only good for me but it’s also good for my kids. So we’re talking more than one generation. So you are optimistic And yet we know Tesla reported a significant drop in revenues this quarter and just laid off 10% of its global workforce. GM has scaled back its EV operations. Ford says it lost money last quarter. If E VS are the way of the future, why are we seeing these troubling signs in the industry? Because it’s a bumpy Rd. when you’re making such a huge transition. Obviously it is not easy. I’m I’m predicting that some car manufacturers will disappear between now and the next 10 or 15 years. But the truth of the matter is that if you look at the International Energy report that was published this week, what they saw is if you look at Q1 sales 2023 versus Q1 sale 2024 around the world, we, we saw an increase of 25% in EV sales just in the US, 15%. And the truth of the matter is that even if let’s say Tesla, I mean, has had to lay off some people, I’m confident that some car manufacturers like especially the Koreans and and Tesla as well and others will be coming. They are coming with more affordable versions of their electric vehicles and it will make, I think a big difference in the years to come. All right, well, here’s something I’d like you to give a listen to. We hit the streets to see how people feel about EVs. Here’s one reaction like the batteries are it costs too much to replace. Environmentally, they’re not that great because the way they how long they or what they have to do to produce them. So I just don’t trust them yet. So David, how do you respond to that as a columnist with driving.ca? Are you hearing concerns similar to this? Well, I one of the few places I disagree with Danielle is the prediction of really cheap E VS cheap enough E VS to get the mainstream audience. Not the first intenders, not the downtown city dwellers making $200,000 here, buying their Tesla’s, getting them into E VS. I don’t sure that any of the legacy automakers are going to do this in anywhere the near future. And going back to those jobs you discussed, OK, The greatest threat to those jobs will be we have a mandate. We must absolutely reach certain elevated goals according to the federal mandate starting in 2026, and we’re not going to get there on the back of 6570 thousand dollar Teslas and and $100,000 Chevy Silverados. We’re not getting there. We need something cheap. And the only people right now that can produce a cheap EV are the Chinese. There’s a lot of commotion down in the states. Basically, either they’re calling for large tariffs or a complete ban of the import of of Chinese E VS. It’s one of the few subjects. There’s bipartisan support here in Canada. We haven’t talked about that. And so from my point of view and and and and Danielle talked about the jobs of the future and you know I agree with them provided we don’t get a flood of cheap Chinese E VS like Europe is undergoing right now. That happens these jobs, these well paying jobs both at Stellantis with their new plant at Norfolk, with their battery plant, at Volkswagen with their battery plant and and now Honda, they may be at over capacity because they just don’t have enough of a market because it’s being stolen by cheap Chinese imports. So that is the one in for a second there because I think you’ve made your point, Daniel. You’re saying, David, you’re saying you know China has these cheap vehicles coming. But Danielle, I see you are shaking your head in disagreement. So what are your thoughts on that? So well, first thing, more affordable E VS are coming to market in North America. Ford is working on them. And as I said, the Koreans are working on them, Tesla’s working on them. And you have to keep in mind that while the price of E VS is starting to go down a bit, the other thing is that gas vehicles are getting more and more and more expensive. I mean, average price for a new car according to Autotrader in March of 2024 was above 67 grand. So you have 50 different models of E VS and PHEVS which are available below that price. OK. Final thoughts, David, As you know, Ottawa has set a target of 100% sales of 0 emission vehicles by 2035. Are we going to make that target? No. And we shouldn’t consider it an abject failure if we get to 50% EVs, 40% hybrids and only 10% ICES. I I don’t understand how could making that large a conversion even in 15 short years should be considered a failure. I I don’t understand that. OK, over to you, Danielle. Between now and 2035, what needs to happen? Well, what needs to happen more affordable. Evie’s price of batteries is going down significantly. I mean, we’re talking about a 40% drop between 2020 and 2026 and battery prices per kWh. So it will happen. I love you, David, but you’re wrong. The thing is that I I love you too, Danielle. But quickly I will let you both agree to disagree. David Booth, Daniel Petan, thank you so much for joining us this evening. Thank you for having me. Thank you.