Vehicle future is still electric – setbacks and all, auto CEO tells London industry

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Despite sluggish sales and automakers scaling back production, the future of automotive remains electric, it just may take longer to get there, London manufacturers heard Thursday.

The president of automotive maker Stellantis, speaking at a manufacturing conference here, delivered an upbeat message about the long-term future of electrified vehicles, saying it’s only a matter of time before hybrid and electric vehicles go mainstream.

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“We get caught up in timing. That’s out of our control. What I’m upbeat about is this transition to electrification. I fully believe this is going to happen. It may not happen at the timelines we all expected,” Jeff Hines, president of Stellantis North America, said at RBC Place London, site of the Manufacturing Matters conference.

“We’re fully committed to zero carbon by 2038 and we want 50 per cent electrification in Canada by 2030, but there will be bumps in the road. There will be a transition, it may take more time than we expected.”

That is good news for the Southwestern Ontario region, which has bet heavily on the electrification of the automotive industry. 

Stellantis, partnering with LG Energy Solution, is building the NextStar Energy plant in Windsor that will make electric-vehicle (EV) batteries and is expected to start production in 2025, employing about 2,500.

Volkswagen is building an EV battery plant in St. Thomas under its PowerCo division that is scheduled to open in 2027, employing about 3,000.

Honda has announced it will make a $15-billion investment in Ontario for EV production. In addition, Cami Assembly in Ingersoll is assembling two electric cargo vans used in the delivery sector. It is also assembling electric batteries on site.

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“Ontario is a huge hub for all of North America. It’s a great place to be,” Hines said. “They’ve been building vehicles here for a long time. There’s expertise we want to hold on to.”

Many of the more than 800 who filled the London convention centre Thursday were suppliers, buoyed by news the trend toward electrification will continue.

At BOS Innovations on Discovery Drive in London, which makes machinery that makes parts for industry, about 10 per cent of its sales supply the EV sector and it wants to see that grow, said Andrew Perkins, director of technology.

“We saw a slowdown in our forecast this year; there was uncertainty. We’re excited about the chance to help customers retool for EV,” Perkins said. “Things have been on hold for about a year but are looking up.”

For the London Economic Development Corp., EVs are just a slice of the larger advanced manufacturing sector it’s looking to build on here.

“Technologies will evolve in the auto industry. We’ve seen different waves and we have to look at keeping a long-term lens on developing a strong cluster of advanced manufacturing companies. We have to have a diversified play. Not all our eggs are in the EV basket,” said Kapil Lakhotia, chief executive of LEDC. 

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Stellantis has an assembly plant in Windsor where it makes its minivan lineup and will soon launch the Charger, a performance car with a nod to its muscle car heritage, in EV and gasoline variants. It also has a plant in Brampton retooling for future production.

Hines was in London as Stellantis is coping with serious sales challenges. The company reported that first-half net profits were down 48 per cent compared with the same period last year. First-half sales in the United States were down nearly 16 per cent, even though overall new vehicle sales rose 2.4 per cent. 

Stellantis expects to finish the year with a negative cash flow – it is spending more than it earns – of $5.6 billion to $11.2 billion.

The automaker was created in 2021 from the merger of PSA Peugeot with Fiat Chrysler Automobiles.

“I think you will see in the fourth quarter we will be very successful,” Hines said.

As for the EV sector, the most recent North American sales figures show EV and hybrid sales were up over the first quarter by 22.9 per cent and up 11.3 per cent year-over-year.

Still, Toyota announced Thursday it will postpone the start of electric-vehicle production in North America to the first half of 2026, Reuters reported.

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In the first quarter of this year, EV sales in the U.S. dropped 7.3 per cent compared to the fourth quarter of 2023. 

Tesla, the industry leader in EV sales, saw sales drop nine per cent in the first quarter and more than six per cent in the second quarter. 

Ford will push back to 2027 from 2025 plans to assemble electric vehicles in Canada. Its electric vehicle unit lost US$1.3 billion in the first quarter.

General Motors is delaying an electric truck plant in Michigan until 2026 and the Buick brand’s first EV. Still, GM’s EV sales were up 70 per cent compared with a year earlier.

Consumers cite the high price of EVs and hybrids as well as concern over lack of charging infrastructure, as concerns.

“Government support is vital,” Hines said of building more charging stations. “Affordability is always a concern when you buy a truck, car or van. This may take more time than we expected.” 

ndebono@postmedia.com

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