CURRENTS OF CHANGE
As Toyota puts focus on fuel-cell vehicles, some are worried Ontario’s auto industry could be at risk of falling behind,
Toyota Motor Corp.’s goal of reducing emissions from new vehicles by 90 per cent within the next 35 years is a wake-up call for Ontario and its struggling auto sector, experts say.
Reaching such a goal would require the world’s second-largest automaker to virtually phase out all gasoline-fuelled vehicles and base future models on hybridelectric or pure electric propulsion (fuel cell or battery).
As part of that effort, it said Wednesday it expects to be selling more than 30,000 fuel-cell vehicles a year by 2020, at which time it will have sold more than 15 million of its popular hybrids, namely the Prius.
“When a company like Toyota sends this kind of signal, that should embolden our politicians and business leaders to realize we’ve got to get out in front of this story,” said Ralph Torrie, president of energy consultancy Torrie Smith Associates.
The fear is that Ontario is falling behind, both as a consumer of electric-drive vehicles and as a manufacturer of next-generation models. As of June, there were about 4,500 plug-in electric vehicles registered to drive in Ontario.
In 2009, then-premier Dalton McGuinty talked of having one out of every 20 cars on Ontario roads electrically driven by 2020. To reach that mark, there needs to be an 80-fold increase in registrations within the next five years.
Automakers, meanwhile, are manufacturing their electric models elsewhere. Toyota’s RAV4 EV was briefly assembled at the company’s plant in Woodstock, Ont., but the model was discontinued in 2014. The only hybrid-electric vehicle made in the province is the Lexus RX 450h.
“Missing the manufacturing opportunities presented by a transformative shift to low-carbon vehicles would have dire economic consequences for Ontario’s labour market,” according to a 2014 report from the non-profit Windfall Ecology Centre.
Toyota may be the largest, but it’s not the only major maker to signal where the auto industry is going. It was reported this year that Germany carmaker BMW plans to electrify all models within 10 years.
Josipa Petrunic, executive director of the e-mobility program at McMaster University’s Institute for Transportation and Logistics, said Toyota’s latest goal is driving a deeper wedge between 20th-century carmakers that are clinging to the status quo and “21stcentury mobility companies” that are embracing electrification, and which see Tesla Motors and even
“Unless there’s a co-ordinated strategy here, the draw to Silicon Valley or Europe will be too powerful to counteract.” JOSIPA PETRUNIC MCMASTER INSTITUTE FOR TRANSPORTATION AND LOGISTICS
Apple as rivals.
“On the supply side, this really is an arm’s race to some extent,” Petrunic said. “Toyota is trying to lead the way in driving the supply chain in all of those areas it believes will define the successful company of the 21st century.”
Caught in the middle of this market transition is Ontario, which depends heavily on automotive manufacturing jobs and is struggling to protect what it has, let alone what it could have.
It’s a losing strategy, said Torrie. “We need to be thinking about building for the future not protecting the past.”
Petrunic said government and industry officials in Ontario, just in the past year, have started to realize that stemming the bleeding won’t be enough, that a co-ordinated leap forward is required.
In November, Petrunic is releasing an electric vehicle road map for Ontario, funded in part by Toyota and autoworkers union Unifor. It will recommend Ontario help create an automotive innovation centre in partnership with industry.
The centre would link together a market in Ontario that is fragmented. It would co-ordinate university and industry research and promote private-public collaboration on everything from electric motors and charging stations to power elec- tronics and battery management systems.
“Unless there’s a co-ordinated strategy here, the draw to Silicon Valley or Europe will be too powerful to counteract,” said Petrunic, referring to markets where next generation auto-sector jobs are flowing.
She said Ontario could also do a much better job of communicating its strengths in areas such as software development and communications, which are increasingly important as more vehicles become networked computers on wheels.
Having engaged with many global automakers, one comment Petrunic has consistently heard is: “We don’t even know what Canada can do for us.”
Calling impact and efforts to date “very modest,” Ontario’s Environmental Commissioner recently urged the province to up its game if it hopes to achieve its GHG emission reduction target.