Preparations at Ford plant in Oakville underway as Ottawa releases EV targets for 2036

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Published December 22, 2023 at 3:44 pm

Ford auto plant Oakville
Ford is spending $1.8 billion to turn the Oakville Assembly Complex into a high-volume hub of electric vehicle manufacturing in Canada.

Ottawa has released the final version of the Electric Vehicle Availability Standard, the process by which manufacturers like Ford gets to 100 per cent zero-emission vehicle production by 2036.

The standard, revealed in draft form a year ago, mandate that all new light-duty vehicle sales in Canada to be electric or plug-in hybrid by 2035. There are also interim targets, with the federal government using both a carrot and stick method to ensure compliance.

Manufacturers will need to meet the emission targets to earn credits. Failure to make the targets withing three years of the date will cost the companies money in the form of government fines.

Light-duty vehicles, such as passenger cars, SUVs and light trucks account for about half of Canada’s greenhouse gas emissions from the transportation sector, while the transportation sector overall accounts for about 25 percent of Canada’s overall greenhouse gas emissions and Environment and Climate Change Minister Steven Guilbeault said the country is “at a tipping point,” said in meeting its climate change goals.

“Many Canadians are increasingly eager to make the switch to cleaner transportation, since it’s a win-win-win in savings, their heath, and the environment” Guilbeault added Tuesday in announcing the new standards. “Putting in place an Electric Vehicle Availability Standard fulfills a major climate commitment from our climate plan.”

The targets begin for the 2026 model year, with a requirement that at least 20 percent of new light-duty vehicles offered for sale in that year be ZEVs. The requirements increase annually to 60 percent by 2030 and 100 percent for 2035.

Given that the average age of a vehicle is 15 years, putting in place a 100 percent ZEV sales target by 2035 will help end the use of polluting light-duty vehicles by 2050.

Federal Environment and Climate Change Minister Steven Guilbeault

“Canadians have been clear: they want clean air, good jobs, and a strong economy,” Guilbeault said. “Since 2015, the Government of Canada has led the fight against climate change. The regulations help to reduce emissions from our transportation and are a key component of the 2030 Emissions Reduction Plan, which puts Canada on a path to achieve at least a 40 percent reduction in emissions below 2005 levels by 2030.”

The new regulations are in line with an increasing number of U.S. states that are adopting similar EV regulations. California requires that 100 percent of new vehicles be ZEVs by 2035, and 10 other states have adopted similar standards beginning in 2026 or 2027.

Automakers in Canada and the U.S. have been preparing for the transition, especially in Oakville, where Ford is spending $1.8 billion to turn the Oakville Assembly Complex into a high-volume hub of electric vehicle manufacturing in Canada.

The newly renamed Oakville Electric Vehicle Complex will begin to retool in the second quarter of 2024 and start producing electric vehicles in 2025.

Part of the transformation will also include a new 407,000 sq. on-site foot battery plant that will import parts from Ford’s operations in Kentucky to be assembled by local workers into battery packs and installed into vehicles in Oakville.

Ford is looking to reach a global production run of two million EVs annually by the end of 2026 and said it will be the first full-line automaker to produce passenger EVs in Canada for the North American market.

“Canada and the Oakville complex will play a vital role in our Ford+ transformation,” said Jim Farley, Ford president and CEO, in a statement in August. “It will be a modern, super efficient, vertically integrated site for battery and vehicle assembly.

“I’m most excited for the world to see the incredible next-generation electric and fully digitally connected vehicles produced in Oakville.”

The current 487-acre Oakville site produces the Ford Edge and Lincoln Nautilus, but the automaker has yet to release what models it will build when the Oakville Electric Vehicle Complex opens.

Canadian automakers still have concerns over the government mandates, however, especially in the speed in which electric charging stations are put in place. Will there be enough to meet demand? And will they be installed fast enough?

Some car makers, in fact, are saying the government should focus on getting more public chargers in service rather than implementing EV mandates.

The Global Automakers of Canada wants Ottawa to initiate talks between automakers, the energy sector and consumer groups to help meet those challenges.

Guilbeault is confident all the wrinkles will be worked out and said the government “will not apologize for being confident in the role Canada can play in the cleaner economy of the 21st century.”

“We are determined to leave this world better than we found it.”

With files from Gene Pereira

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