The Bridge with Peter Mansbridge - Trucker Convoys, O'Toole's Leadership or EV's -- What's Really Going To Change Your Life?

Episode Date: February 1, 2022

Today we focus on the big picture of electric vehicles.  While auto manufacturers have their foot on the pedal, just how ready is the country for the massive change that electrification will mean?  One of the country's leading experts on the auto industry -- Dr. Charlotte Yates, @uofgpresident is our guest.

And hello there, Peter Mansbridge here. You're just moments away from the latest episode of The Bridge. Aaron O'Toole's leadership, truck convoys? No, we're not going to talk about those. We're going to talk about something that may really change your life. Now, welcome to February. Can you believe it? We're into February. I think I've mentioned before, maybe a couple of years ago, that I have like a 1920s desk calendar that I have. You know, it's one of those ones where you roll the dates and the days and the months.

And it's still holding up great, you know. It's still got the little sale label underneath it. It was made in Aurora, Illinois. Sold for $1.25 at the local store. But it's my way of staying in touch with the date because I roll it every day. I love it. Love this little guy.

Sits on my desk. And so this morning, I rolled into February of 2022. It's probably 100 years since this thing was made. 100 times it's rolled through these dates. So here we go. We're into February. Who would have thought it?

We're almost at the second anniversary of when we really started to take COVID seriously, right? And think back those two years. How seriously did we take it then? How worried were we about it then? Well, we were pretty worried about it. But I don't think any of us really thought, oh man, two years from now,

we're still going to be doing this. But we are. And what are we talking about? Well, listen, the front burner issues this week, you know, we've been warning you for, I don't know, the last couple of months that Aaron O'Toole was dead man walking when it came to politics. And that walk may be over as of tomorrow.

This caucus, the caucus revolt is definitely underway, and when these things start to happen, they start to steamroll. Will he pull the rabbit out of a hat and survive it? Yeah, maybe. I guess we'll know tomorrow. It's a tough slog for Aaron O'Toole. But we're not going to talk about that today because we've talked about it so many times

over the last couple of months. I'm not sure there's anything more to say until we're dealing with what actually happens. And we've talked a lot about the trucker convoy over the last few days. I'm not sure there's much more to say about that. Got a lot about the trucker convoy over the last few days. I'm not sure there's much more to say about that. Got a lot of mail last night, emails from many of you. And I'd say it's probably running 90% against the type of protests we saw.

Not necessarily all the issues that were raised by it, by some people, but the whole way it unfolded over the weekend. The images that we saw. The racist nature of some of the protests and comments. That did not go well with at least the people who listen to this podcast. A very unfavorable take. But we're not going to talk about that anymore.

You know, we'll see how the week progresses. I'm sure we'll talk about both these subjects tomorrow on Smoke, Mirrors, and the Truth. No, we're going to talk about something else. And I said provocatively in the tease to this that it's probably will have a much greater impact on your life and your kid's life and your grandkids' life than the trucker convoy or the aeronautical leadership. and I kind of have that feeling because I've had a lot of mail from many of you over the last year since we first started keeping a watch on this story, and it's the electrification of our modes of travel, and especially cars, vehicles, electric vehicles. So what we're going to do today is we're going to step back from the daily barrage of stories

on EVs, and there are a lot of them. You know, the last week there's been much talk about GM's decision to retool some of its plants in Michigan at the tune of $7 billion and the impact that that's going to have across the industry. But that wasn't the only one the last week. You know, Renault, Nissan, Mitsubishi have an alliance. They confirmed plans to build 35 new electric vehicles, like 35 different models, okay, by 2030. And you know what they're going to spend? $25.8 billion U.S.

With the aim of having all those vehicles ready by 2030, which is not that far away. So there are big changes coming coming and they're coming rapidly and i know that most of you have at least been thinking about this if you don't already drive an ev you're thinking about it and many of you are saying my next vehicle will be an ev but we'll see right how ready is the canadian marketplace is the north american marketplace for such a move on electric vehicles because it's not as simple as we build them, you buy them, you drive them. There's a lot more involved than that. So I wanted to reach out to somebody who could give us the big picture, the big perspective

on this story. And I found her in what you might think is an unlikely spot. Canadian. So I'll tell you who she is when we come back. You're listening to The Bridge on SiriusXM Canada, channel 167 Canada Talks, or on your favorite podcast platform. Wherever you choose to listen to The Bridge,

man, we're happy you've joined us. So let's get at it. EVs, electric vehicles, and the whole electrification business of the way we are going to be traveling, and in some cases already are. So who did I find that was going to help us with this story. I went to the president's office, the president of the University of Guelph, Dr. Charlotte Yates. Dr. Yates is a recognized expert in the automotive industry in this country.

Has been for most of her career. That's where one of her main areas of expertise lies, the auto industry. Well, this may be the most significant change in the auto industry since the auto pact in the 60s, the trade arrangement between Canada and the United States around the building of cars. Well, everything is changing.

That will be too. The auto industry is really central to the Canadian economy, especially the Canadian economy in central Canada. After oil and gas, I think it's the biggest thing in this country. So how ready is it? That's just some of the questions that I wanted to talk to Dr. Yates about. So let's get at it. Dr. Charlotte Yates, president of the University of Guelph. Dr. Yates, you've been monitoring the automotive

industry for a long time, most of your professional life. And that includes, obviously, the electric vehicle situation. And I'm wondering, at what point did you start taking the potential for EVs seriously? So I would say taking them seriously about three to five years ago. And it really came as, comes after the kind of Paris commitments to climate change, environmental change, which we know that individual vehicle use contributes significantly to emissions. And therefore, there was a sense we had to reduce our emissions through vehicle use. But I also think it has to do with do we have the capacity to build vehicles which are accessible to the regular consumer, electric vehicles? And that continues to be a challenge I would say and there are a number of challenges

which you can think about producing a battery that is at a cost level that will not make the vehicle ridiculously expensive and therefore out of reach of the regular consumer but also the issue of distance and then the issue of charging so all of these are ones where I think the last three to five years, we've seen a kind of coalescence of governments, industry coming together to say, we really need to figure this out. How much of your interest was sparked by the success of Tesla? Tesla's a real game changer, actually, I think, in the electric vehicle market. And it's interesting to have watched the evolution of Tesla. I think today or this past week, they announced they will be producing a million vehicles a year. Five years ago, people,

especially in the auto industry, thought of them as an upstart. They weren't an auto producer. How were they ever going to produce something affordable? You know, there were jokes about their lack of reliability. And yet, when you drive down, when you're driving around now, Teslas are quite common, increasingly common. And I think it demonstrates they've been able to, as they promised, to reduce the price of the vehicle. They're still more expensive than the regular. And they produced a range of vehicles whose reliability is great enough. And they developed a bit of a cachet.

And that's because people who are environmentally kind of conscious say, if I drive a Tesla, I'm saying to the world that I'm serious about contributing to our reduction of emissions. So Tesla's been a game changer and they put pressure on the other automakers. Well, talk to me about that because where would we be right now? Do you think, how would you describe where we are in the evolution of this business? So if we end with Tesla,

Tesla's big also achievement was the development of the lithium-ion battery, which is really what powers a large part of the fully electric as opposed to hybrid vehicles. So where are we today? I think we're well advanced in terms of the development of the lithium-ion battery. It still is a more expensive way to run a car than an internal combustion engine powered by gas. Although I'm sure that equation was changing as gas prices go up. But nonetheless, it's still more expensive, but they're certainly more reliable than they used to be. The issue of the supply chain is a challenge. Lithium-ion batteries require various raw

materials, of which Canada is very rich, but they require a supply and a production capacity. And just as a footnote, it's very interesting that General Motors, Ford, those companies are not producing their own batteries often. They're producing them in partnership with companies like Samsung, LG, companies we would not normally have seen or didn't used to be involved in auto production. So we've gone a long way in terms of battery. I would say we're lagging, certainly in Canada, except in Quebec, lagging in terms of the infrastructure. Charging infrastructure is a major issue. It also involves changing where we live or what's at our home. We need a plug-in station at home. Most people don't have that. And of course, one of the other factors is,

do we actually have the electrical grid to sustain? Imagine where I live in a fairly dense neighborhood. Could we all have cars plugged into the electric grid and not cause some failure? So I think we're a long way along. We still have challenges. The difference is there's a will by companies and governments. They really want to solve this. Whether they can, I think we still have to see. You know, you've opened up the door to a lot of different questions there.

And I want to probe a couple of them. First of all, that issue of, you know, living on a, you know, a block of houses where everybody would have an electric vehicle. Is there a, do you know the answer to that question about the power grid? Could it handle that number of cars? I think right now it's not clear that it can. Some areas it might be able to. Believe it or not, those areas where they have lots of supply of electric, hydropower, electric or hydro or nuclear, however one produces electric power, maybe. But the idea is that in large cities, it's not clear that we do have the grid yet or the grid that is robust enough to take that kind of draw of power.

Because often the draw of power, it's not just the total. It's the fact that we're probably all going to draw at the same time. Because, of course, most of us work during the day. We drive to work in the morning. We come home at night. So there's some logistical issues there. That's where Quebec is. Quebec's doing some really interesting work on that. Both they have Hydro-Quebec, which is a major strategic resource for them as a province, but also they're doing a

lot of R&D into how to improve that capacity, how to store power for those off hours so that we can. So there's a lot of work also being done there. So I think it can be done, but I think we're a ways away. And then people need to invest in their housing infrastructure to be able to charge a vehicle or they have to have enough of them at workplaces. And that's going to be an issue for workplaces. Do they pay for the electricity? Or does the person who is their employee, when they plug in, do they pay a premium? Because right now, when people park at their workplaces, often they don't pay.

That's part of their employment package. So, this is an interesting question, Sam. They sure are. In terms of the manufacturers, I mean gm just announced in the last week or so that they're going to put i think it was a seven billion dollars into basically retooling a number of their plants um and operations to deal with electric vehicles place that on the significance of what's happening first in North America? So GM's commitment is huge, and it follows on a very large commitment by Ford. I would say Ford and GM have been the leaders in terms of the North American producers

and their investment in North American production, a large part of which is at the moment slated to go to the U.S. There is some investment in Canada, and Canada is working very, very hard to recruit that investment because you don't want to be the producer of vehicles that are not being the car of the future. You want to produce that car of the future. So that investment by Ford and GM is huge.

And I think five years ago, there's no way we saw GM talking about zero emissions. Now they are. The race is on which car company can produce to deliver on government agenda, but also the emerging consumer agenda, which is to be more environmentally conscious and more environmentally sustainable. It has huge implications for production. I cannot understate. We just recently, my research team just recently did a really

fun project comparing what are the parts that go into an electric vehicle, a battery-powered electric vehicle versus an internal combustion, a basic gas engine. It's incredible. There are hundreds less parts in an electric vehicle. And Canada makes a lot of parts. We employ over 100,000 people in the auto industry. Large numbers of those are in the parts industry. Many of those parts currently go into the kind of internal combustion engine. This requires a very big shift in the supply chain, as well as in individual companies responding to changes

in the needs and demands of the automakers themselves. That's significant. And I think that's a big challenge, which the automotive parts makers in Canada are trying to get a leg up on that and show that they can do that by being nimble, adaptable, innovative. But it also means that there's going to be a lot of churn in that economy. And what I mean by that is if you have a lot of smaller companies in the auto parts industry, some of them will go under, but they may be replaced by other startup companies, which if you think that, oh, the Waterloo kind of Toronto, that triangle of technology and R&D,

a lot of those around those areas, there's a lot of startup companies which are computer-based, engineering-based. They are the ones that are going to be trying to get an eye and getting into that supply chain. So there could be some very interesting turnaround what companies contribute to the automotive industry and are part of the automotive supply chain.

But that can be quite disruptive in terms of people who are employed, in terms of the type of skills that you need, and, of course, where those companies are located. And as you said, that auto parts industry, especially in central Canada, is a major part of the economy. And we're talking fundamental and significant change going on here, not only in what they're doing, but who's doing it. And so a lot of those jobs, one assumes, are going to be at stake as a result of the change

that's going on. Let me talk about the consumer angle here here for a minute because consumers are being bombarded with um with news about electric vehicles i mean there's stuff every day now and they just have to turn on their televisions and see that everybody's in the game or seemingly every auto manufacturer is now in the game the europeans are in with their high-end products like mercedes and bmw the japanese as you've pointed out before are are are very strong and this have been for some time first with hybrids um but consumers have got to make a choice and the ones that i talk to you hear increasingly you know i i'm i'm buying right now i'm buying a conventional vehicle or I have a conventional vehicle.

I'm going to wait a couple of years, but my next one is going to be an electric vehicle. And when they say they're waiting, they're waiting for a couple of things you touched on earlier. So I wanted to delve into that a bit. One is batteries and others is charging stations. Where are we on those two issues? Batteries first. So on batteries, I think the batteries certainly have, if we compare just in the last two years, the length of the distance that a single charge on a vehicle battery can go is much, much greater. I think we're reaching into, I think the Audi and so on, I think they're

getting into up to almost 500 kilometers. And then if you can get to a kind of charging station, which does kind of the more rapid charging, then you can recharge enough to get going in, I don't know, half an hour, maybe less. That's going to be the issue because Canadians drive long distances. I'll give you an example. We own a cottage in Quebec. We drive seven hours to that cottage. You can't get there on a single charge. Now, if I'm already estimating that, do I want to wait at a garage to see if there is

a charging station and then see if I can, do I want to wait an hour as opposed to grabbing a coffee and getting going? So, you know, those are logistics. And Canadians really are thinking about that. So I think we have, I think the batteries are really improving so rapidly. I do expect distance to be addressed. Long-haul distance is very different if we're talking about trucking, although trucking and electric vehicle is also fairly advanced. And Canada, I think, will play a significant role there. In terms of infrastructure, we're behind.

And I would say Quebec is ahead. We're behind in large parts of the country. I don't think we recognize how significant this kind of investment needs to be. And so that's where there needs to be serious planning, serious investment in that public infrastructure, because that's part of the incentive for getting people to drive these cars. And I think it's normal that consumers would want to wait because most consumers are not at the kind of early adopter stage. They want to make sure it's reliable. They want to make sure it's cost effective. They want to make sure the car is the second largest or most expensive investment most of us will make that's big so it's understandable people are a bit cautious but it also speaks to people

are very environmentally conscious so they're driven by two uh kind of competing imperatives if you will so there's a lot of work to be done, but I do think governments certainly have shown themselves, many governments, to be very, very serious about this because it's the only way in which they will be able to meet their emissions targets. Now, I will add the one uncomfortable conversation that we're not having with the vehicle is ultimately to get emissions down, we have to drive less. And the electric vehicle is a solution to allow us all to keep driving as much as we like. Whereas truly, we need to think about driving less and integrating our transport system so it's more of a mobility platform. So it's easier for us to drive our car but immediately jump onto a train or some other environmentally sustainable form of transport. That's a bigger conversation, which is much more complex.

I'm fascinated by the fact that both government and industry seem to be on the fast track now on this issue. Are they together or is one ahead of the other? Who's following whom on this path to electrification of vehicles? That's a fabulous question. And I'm not sure I can say. I would say governments have accelerated the push. The push we've seen in the last two to five years is definitely related to governments. Look at the impact of the election of Biden on a shift in terms of investment decisions

by particularly North American producers. And because he made it very clear when he was running in his election that climate change has long been on his agenda, very big on his agenda. Canada can't have that same impact because we're a small market for vehicles. And therefore, even though we may be an earlier celebration of climate change, we don't have that impact. The American vehicle market is massive. In fact, vehicles are Canada's, I mean, the auto industry is Canada's second largest export industry to gas and oil. Great paradox. So I think governments have led the way, but now what's happening

is with industry jumping in as they are, and companies are having to catch up because when ford and gm announced then stelantis the old chrysler uh fiat chrysler you know they jump in and so you start to see momentum building and then even if you get governments that are less committed to climate change companies can't pivot on a dime. Once you start investing in that infrastructure to produce electric cars rather than internal combustion engines, you can't then just say, oh, tomorrow we're just going to flip back. So this train has left the station. And that's what's fascinating about this moment in time, is we really are seeing companies

make that investment and that means we are headed in there regardless now i think although governments can facilitate it and will be needed for it to be done successfully last point um is this the an enormous part of the trade relationship between canada and the u.s. is built around the old auto pact. And how is it impacted by this? Oh, that's a wonderful question. In fact, that's one of the things that my research group has been doing a fair amount on. As we know, the most recently negotiated U.S.-Mexico-Canada trade agreement has much stronger requirements in terms of domestic content for vehicles and what labor content is. So one of the pushes for us to produce batteries is we've always been a big producer of engines. North America has been, to put into its own vehicles,

particularly the GM Ford Stellantis. So what's interesting is there is a real push to make sure that they can meet those thresholds in that trade agreement within their content. So hence, they need to what we call, ensure the production of batteries. For long-time batteries, until fairly recently, batteries were imported. Now that's where there's a real push

to develop battery production in North America, particularly in the United States. The second related question, and this links to an earlier topic we talked about, and that's employment. The question will be where Canada, the US and Mexico, where they each play out in this. As we know, the most recent kind of noise in this

was Biden's proposal for incentives for people to buy electric vehicles, but only American built ones. This will have, and will have if it gets back on the agenda, catastrophic impacts on the Canadian auto industry and Canadian automotive employment, which is why Canadian government is lobbying so hard. So there's a lot of trade issues involved here, and there's a lot of potential trade friction around this. And we'll have to see where Canada fits in that tri-country kind of trade agreement in the near and long term.

Dr. Yates, this is a fascinating conversation. I've got a feeling that we'll be talking about it again because there are so many angles to it. And so many of them are in a moment of time now, but that moment of time is going to it. And so many of them are in this, we're in a moment of time now, but that moment of time is going to change frequently, one assumes, over the next few years. Absolutely. So thank you for doing this

and we will talk to you again soon, I'm sure. Very nice to chat today on one of my favorite subjects. Okay, take care. Bye-bye. Okay. Take care. Bye-bye. Dr. Charlotte Yates, president of the University of Guelph, but also one of Canada's recognized experts on the automotive industry. And I hope that helped give you a sense of the big picture on this story.

Because it's involved. It's not as simple as doing a buy an ev there's so many other things at stake here um and i think that that gives us an overview and we're going to stay on this story uh over the next while um months uh for, because it is rapidly changing as we watch the huge investments that are being made by auto manufacturers and consumers on the EV market. Here's a related story that was in Bloomberg before we leave you for this day. Bloomberg has been monitoring the global investment in low-carbon energy transition.

And the numbers for last year, 2021, are pretty startling. The global investment in low-carbon energy transition hit $755 billion U.S. So, you know, that's a lot of billions. So why does this matter? Well, global investment in the energy transition,

and I'm reading from parts of the Bloomberg article here, total of $755 billion U.S. That's a new record. Off the back of rising climate ambition and policy action from countries around the world this is according to the energy transition investment trends 2022 published by bloomberg nef investment rose in almost every sector covered by the report, including renewable energy, energy storage, electrified transport, electrified heat, nuclear, hydrogen, and sustainable materials. Only carbon capture and storage recorded a dip in investment, though there were many new projects announced in the year. Electrified transport, that's what we've been talking about today,

which includes spending on electric vehicles and associated infrastructure, was the second largest sector with $273 billion invested. With electric vehicle sales surging, this sector grew at a breakneck rate of 77% in 2021. So when I tell you this story is changing rapidly, that's the proof, right? Sales surging. This sector grew at a breakneck rate of 77% in 2021 and could overtake renewable energy in dollar terms this year, 2022.

China was again the largest single country for energy transition investment, committing $266 billion in 2021. The U.S. was in second place, with considerably less than half of what China was spending, with $114 billion. Though EU member states, as a bloc, committed more than $154 billion. So there's some, you know, some facts and figures about the way this story is changing,

and I find it fascinating. Because as Dr. Yates said, you know, five years ago, we were still kind of looking at this as, well, isn't that neat? There's a little electric vehicle going down the street. But in those five years, everything's changed. Everything's changed on so many facets of our life,

let's face it. But this has been a constant over those last five years and it keeps changing even through these last two years where everything has been conditioned by the pandemic. So this story is not going away. It's only going to increase. And the impact it can have on Canada, not just on us as consumers,

but on the industry, as Dr. Yates pointed out. I mean, the auto parts industry is huge for central Canada. And it's going to have to change. It's going to have to adapt to a very different kind of situation, as she explained. All right, we'll stay on this story. We'll keep monitoring it, and we'll keep adding to it whenever there's something worthy of adding.

In the meantime, tomorrow, Smoke Mirrors and the Truth. Bruce Anderson will join us from Ottawa. Lots to talk about there. Who knows what will happen on the Aaron O'Toole story. The next 24 hours are critical, perhaps the most important 24 hours of his political career. And there may or may not still be something to say about the convoy. So we'll keep that in mind.

Your letters are always welcome at the Mansbridge Podcast at gmail.com. That's often the basis of our Thursday program. And Friday, of course, is Good Talk with Chantelle Hebert and Bruce Anderson. So that's it for this day. I'm Peter Mansbridge. Thanks so much for listening. This has been The Bridge. We'll talk to you again in 24 hours. Thank you.