Tag Archives: Toyota

Deal with Magna International and Magna E-Car builds more momentum for Ontario EV strategy

The Ontario government announced today it is working with Magna International and its majority-owned Magna E-Car division to assist in the development of a concept electric car, parts for hybrid and plug-in vehicles, components made of lightweight and bio-based materials, and an alternative energy project, details of which were not disclosed. The announcement is expected to lead to the creation of 738 new jobs and the protection of more than 1,300 jobs at Magna facilities in Aurora, Brampton, Concord and St. Thomas.

The government release didn’t mention dollars, but reports earlier in the day suggested that the government would be contributing $48 million toward what will be a $432 million R&D investment. This comes after a number of earlier EV-focused announcements, including Toyota’s disclosure last month that it will build its RAV4 electric vehicle at its plant in Woodstock, Ontario, and the government’s announcement a week later that it is creating an $80 million fund to help spur development and deployment of EV charging infrastructure in the province. Oh, and there was also the $2 million investment in Dana Holding Corp. toward building battery cooling systems for hybrid and plug-in vehicles.

A lot has happened in less than a month. Things are starting to come together… cautiously optimistic.

 

Ontario pulls rabbit from hat: Toyota to build Tesla-boosted RAV4 electric in Woodstock

Exactly one month ago on this blog I criticized the McGuinty government for failing to make good on its vision of turning Ontario into a hub for electric vehicle innovation and manufacturing. Premier McGuinty laid out that vision more than two years ago, announcing generous incentives to stimulate public interest in electric vehicle purchases and signal to the world that Ontario was an EV-friendly jurisdiction — a good place to innovate, invest in, and build electric vehicles and related infrastructure. My criticism is that, after 2.5 years, nothing really came of it. No major — or minor — manufacturer had announced plans to make an EV or plug-in hybrid model in Canada. All of that manufacturing and the associated jobs were going to Michigan and Ontario was still handing over money to the major automakers just to keep the status quo from crumbling — i.e. to save jobs, not necessarily create new ones as part of a future-looking industry.

Well, we heard today that there has, in fact, been something in the works. My colleagues Tony Van Alphen and Robert Benzie of the Toronto Star had the scoop: Toyota plans to manufacture its RAV4 Electric model out of its facility in Woodstock, Ontario. This is interesting news, as we know that EV manufacturer Tesla Motors is supplying technology and services — including to the battery system and related components — for the RAV4 EV as part of a $110-million multi-year contract with Toyota. Tesla actually built the prototype electric RAV4 at its own facility in Menlo Park, California.

There was an expectation out there that Toyota would eventually choose to manufacture the RAV4 EV in California. But Toyota’s Woodstock facility in Ontario already makes the gas-powered RAV4, so it made sense to build the electric version there as well. In my blog post last month, I pointed out that $140 million in loans and grants that the Canadian and Ontario governments were giving to Toyota “to upgrade its manufacturing operations in Cambridge and Woodstock” didn’t come with any electric strings attached. Seems some of that money was earmarked for this new venture — I stand corrected, with foot in mouth.

Indeed, I ended my earlier blog post this way: “Wouldn’t it be nice if the Libs, after three years of talk, actually pulled a rabbit out of the hat and delivered on that earlier promise? Perhaps there will be a pre-election surprise, but don’t count on it.”

Well, certainly we could use more good news like this, but consider this a rabbit pulled from a hat — Ontario’s Bugs Bunny moment. Keep ’em coming.

ANOTHER THOUGHT: How might Tesla Motors, based in Palo Alto, California, feel about the RAV4 electric being built in Ontario? Well, Tesla CEO Elon Musk has close ties to Ontario, as he revealed in this feature I wrote back in October 2009. He did his undergraduate at Queen’s University in Kingston, and met his former wife there. Chatting about the company’s future vehicle line, Musk told me at the time the company would itself give Ontario a serious look as a place to set up manufacturing. “It’s a cool area to do work, and I know the Canadian auto plants are some of the most efficient in North America, so it would be wise for us to take a close look,” he said. I wonder whether this initial commitment from Toyota to manufacture the RAV4 electric in Ontario is poised for greater things. On a conference call today to discuss the release of Tesla’s second-quarter results, Musk hinted that his company’s deal with Toyota could expand “by an order of magnitude” if discussions currently underway between the two companies bear fruit. Something to watch.

The incentives are there, the signals have been sent: Where are the Ontario manufacturers of plug-in vehicles and technologies?

UPDATE: The “comprehensive study” referred to below was, as suspected, never done. Here is a response from the Ministry of Transportation on the matter: “The study was not completed as originally intended. Subsequent to the press release that is being referred to, MTO conducted research and analysis to determine options the Ontario government could take to support consumer adoption of electric vehicles. This included identifying types of electric vehicles major OEMs were producing and when these vehicles were expected to enter the Ontario market. In addition, a broad scan was undertaken to determine what other jurisdictions are doing to support the introduction of electric vehicles. A cross ministerial working group on EVs was set up to identify the barriers and opportunities to the introduction of electric passenger vehicles in the province. Elements of this research will be released as a public education document to inform Ontarians about this newly emerging transportation technology. This document is expected to be available on the ministry’s Website in the very near future” — i.e. more than two years after the comprehensive study originally envisioned, this “newly emerging” technology isn’t as new as it once was.

On Thursday, January 15, 2009, Ontario Premier Dalton McGuinty walked in front of a podium at the Toronto Convention Centre and signaled to the world that the province was a good place to invest in electric-vehicle manufacturing and infrastructure. “One of the most important things we can do is demonstrate we are truly an electric-car friendly jurisdiction,” McGuinty said to a scrum of reporters, outnumbered only by the black-suited government bureaucrats and policy wonks trying to “manage” the importance of the event. What McGuinty announced was a partnership with Better Place, the California company led by Shai Agassi that’s trying to establish electric-vehicle charging and battery-swapping infrastructure around the world. There were no investments from either side. Rather, Better Place said it would establish an office in Toronto and serve to educate the public about electric vehicles while also demonstrating its charging technology (a commitment the company, to its credit, fulfilled with this March 2011 announcement).

“The province has committed to conducting a comprehensive study, which will look at ways to speed up the introduction and adoption of electric vehicles. This study is scheduled for release in May 2009,” according to a Better Place press release issued on the day. Personally, I don’t remember having ever seen that comprehensive study, nor do I know if it was ever done (am currently checking on this).

Better Place continued, “This announcement maintains the province’s traditional strength in automotive production while incorporating the forward thinking technology of battery operated vehicles. Embracing this technology in its early stages will provide the province with the stimulus needed for enhanced job creation and economic growth.” Indeed, the province’s own press release stated,”Expanding the use of electric vehicles by consumers and government will help create and sustain jobs in the auto sector and put Ontario at the forefront of the new, green economy in North America.”

McGuinty, at the press conference, specifically said: “It’s going to make it more attractive to build those very cars right here in our province.”

To strengthen the signal sent to the market — that is, the message that Ontario is serious about electric vehicles — McGuinty also announced the province would offer rebates of between $4,000 and $10,000 (among the highest rebates in the world) for plug-in hybrid and battery electric vehicles purchased after July 1, 2010. It would also issue green vehicle license plates that would allow drivers to use high occupancy lanes and gain access to public charging facilities and parking at Ontario government and GO Transit lots.

The vision was sound. But two and a half years later, what has all this signalling and messaging and “incentivizing” brought to the province? Not a heck of a lot. Not only is there not a single original equipment manufacturer in the auto sector making (or planning to make) a plug-in vehicle in this province, Ontario car buyers have to wait a year or more before they can purchase plug-in vehicle models that are available in the United States, and they have to pay several thousands of dollars more at a time when the Canadian dollars is worth more than the U.S. greenback. There’s no manufacturing of electric-vehicle charging systems and related infrastructure being established within our borders. There’s no indication that homegrown Magna, which is making and supplying the electric drivetrain for Ford’s upcoming Focus BEV, is doing the manufacturing in Ontario. There’s no hint of any foreign, including Chinese, manufacturers planning to set up operations in Ontario. We’re not even making conventional hybrid-electric vehicles in this province.

There is one battery maker that I know of, Mississauga-based Electrovaya, that is producing battery packs for two Chrysler demonstration plug-in models (a pickup and a minivan), but Electrovaya was here before McGuinty’s 2009 announcement and, if this little company does end up getting volume orders, there’s no sign yet that it will do such manufacturing in Ontario. If there is something I’m missing here, please let me know.

The Ontario Smart Grid Forum — a group representing members of Ontario’s utility sector, industry associations, public agencies and universities — recommended in a February 2009 report that:

A Task Force, led by the Ministry of Economic Development and involving other relevant Ministries, should be created consisting of representatives from the auto sector (vehicle manufacturers and suppliers) electricity sector (OEB, IESO, OPA, distributors and generators) and universities to develop a comprehensive plan for enabling plug-in electric vehicles in Ontario. The plan would address policy, financial, and electricity system impacts of substantial electric vehicle penetration and identify what is required to ensure that vehicles can be charged as they develop. The Task Force should link to the ongoing collaborative work by the Electric Power Research Institute (EPRI), the Society of Automotive Engineers (SAE) and standards development organizations to develop electric vehicles standards.

Never happened. Neither has the government released an economic development roadmap related to electric vehicles and technologies.

From what I gather, none of the billions of dollars in bailout money that went to the Canadian operations of major U.S. automakers during the economic meltdown were conditional on these companies establishing a plug-in vehicle/technology manufacturing footprint in Ontario, nor have any rewards since then. Just today, it was announced that the federal and Ontario governments would be supplying up to $140 million in loans and grants to Toyota to upgrade its manufacturing operations in Cambridge and Woodstock. Again, no mention of Toyota’s commitment or intention of building capacity for next-generation vehicle technologies in Ontario.

At this point in time, it appears the McGuinty government’s 30-month-old “signal” to the auto sector as an attempt to attract investment in next-generation electric vehicle technology/infrastructure has been a dismal failure. This next-generation manufacturing is instead being created in Michigan and other U.S. jurisdiction. Ontario’s Ministry of Economic Development and Trade has failed to execute on the promise of “creating and sustaining jobs” in this emerging and increasingly strategic part of the North American transportation market.

What gives? Can’t say, but wouldn’t it be nice if the Libs, after three years of talk, actually pulled a rabbit out of the hat and delivered on that earlier promise? Perhaps there will be a pre-election surprise, but don’t count on it.

Toyota secretly developing solar car?

I guess it depends on what you call a solar car. I mean, a car with some panels on the rooftop might offer some juice, but until we see some major advances in cost and PV efficiency I can’t see how it would make a huge difference. Now, it does make sense if Toyota is looking at ways of better combining solar PV on a residential rooftop with vehicle charging.

Anyway, it’s interesting to see Toyota thinking so far in the future. Here’s a link to the AP story.

UPDATE: As expected, Toyota is denying that it’s building a solar car.