Doug Firby, Automotive News Canada
October 28, 2020

EDITOR’S NOTE: This is part three of a three-part Automotive News Canada series called Electrifying Oakville, which takes a closer look at the pledge Ford. Motor Co. has made to electric vehicles and its only assembly plant in Ontario, and how that could affect the Canadian auto industry as a whole.

As automakers shift to electric vehicles, Canadian suppliers face a “valley of death,” having to invest in expensive new technologies with little short-term prospects to earn a profit, analysts and auto parts executives say.

“We’re trying to develop portions of the supply chain from scratch,” said Brendan Sweeney, managing director of the Trillium Network for Advanced Manufacturing, a London, Ont.-based nonprofit organization dedicated to raising public and investor awareness of Ontario’s advanced manufacturing.

A collective agreement reached in September between Unifor and Ford Canada commits the company to begin retooling its Oakville assembly plant in 2024 to build five battery-electric vehicles there by 2027. This initiative presents suppliers with both opportunities and challenges.

Major Canada-based suppliers, such as Magna International and Linamar, might only need to retool to build some EV components, but other portions of the supply chain simply don’t exist here, Sweeney said. While many EV components are similar to those found in internal combustion engine (ICE) vehicles, propulsion systems (electric motors, transfer cases and related parts) and batteries are unique to EVs.

“The big one is batteries. We don’t do that much in Canada…China, Japan and Europe have much more advanced battery technologies.”


Smith said automakers might estimate high volumes — Unifor President Jerry Dias said Ford could eventually produce 200,000 EVs annually in Oakville — but the actual sales could be much lower.

“Everyone estimates that they’re going to build 200,000, but it might turn out to be 65,000,” said Smith.

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said the challenge small parts makers face is “reaching scale.”

In some cases, those companies might seek partnerships with large, diversified companies, such as Magna, to achieve the capacity to manufacture at the scale required by automakers.

The potential for a large supply order will likely “inspire” those companies to develop the necessary capabilities, he said.

Volpe cited three smaller companies with strong potential: Quebec-based Dana TM4, eCAMION and Electrovaya.

Dana TM4, a partnership between Dana and HydroQuebec, develops electric-vehicle motors, generators, power electronics and control systems; eCAMION is a Scarborough, Ont.-based energy-storage company formed by engineers who worked on EVs for General Motors; and Mississauga, Ont.-based Electrovaya developed lithium-ion based rechargeable batteries for the NASA space shuttle program.

“These three long-term players may finally see their day,” said Volpe.

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