Ford has to address why it can’t be trusted to use electric vehicles

It’s a shame the efforts of Ontario automakers to lead on the electrification of their product line have been lost to the war of words that’s going on between the central government in Ontario…

Ford has to address why it can't be trusted to use electric vehicles

It’s a shame the efforts of Ontario automakers to lead on the electrification of their product line have been lost to the war of words that’s going on between the central government in Ontario and the Ford government in Ontario, the American premiership, and now Donald Trump.

On 20 May, U.S. President Donald Trump announced that he was imposing tariffs on Canadian steel and aluminum of 25% and 10%, respectively. And the Canadian government responded by confirming it would proceed with retaliatory tariffs on a wide range of American products that are likely to include motorcycles, bourbon and orange juice.

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To add to the firestorm, on 23 May, Ontario premier Doug Ford made a call to scrap the provincial government’s strategy to promote the use of electric vehicles and bikes across the province, which has resulted in more than 2,000 of the vehicles being purchased by Ontario buyers. Ford revealed they would not be buying a single electric vehicle, despite electric car sales in the US surging more than 50% last year to a record 1.6m.

Ford has stated that electric vehicles are not an issue of economic viability, but rather they’re bogged down by “onerous regulations.” The irony is Ford has a very stark case to argue.

As of 2017, Ontario had the world’s seventh-largest publicly traded automaker in Ford Motor Company, which bought their way into manufacturing vehicle batteries at a large volume back in 2006 and became a renewable energy manufacturing powerhouse and supplier as a result.

Ford is not alone in not purchasing electric vehicles. General Motors did not produce an electric car in 2017. Or at least the few that were produced weren’t sold in the US market. As of June 2017, fewer than 100 all-electric Chevrolet Bolt sold in the US, and just 1,000 at total company level. But that number is likely much higher when one considers all the sales that fell through the cracks (38% in 2016, according to G.M. reports).

Considering Ford and other automobile manufacturers were actively developing this technology for the past two decades, it’s baffling to see Ford stand tall on its refusal to commit to actually making and selling an electric vehicle.

Who is going to drive our city’s planned driverless fleet of more than 60,000 vehicles over the next decade? And who, apart from transit agencies and government, is going to effectively fund the rollout of these fleets?

Given the industry perception of electric vehicles, it is not clear why Ford is refusing to go electric for its own fleet at a time when many other western car manufacturers are already poised to launch their own. They say they’re waiting on the government to implement regulations, yet of the 14 guidelines released by the Ontario government on how it will control the future of automotive, not one is related to the future of electric vehicles.

Even Apple found they couldn’t justify making batteries in Japan: they had better bring them home. Intel, another major chip manufacturer, announced plans to invest US$500m in their Canadian factory. There are 15 factories in Ontario that produce automobile batteries and motor boards.

Many leaders have recognized the need to shift from oil and gas to new energy sources and the inherent sustainable benefits for us all. That includes company leaders and government at the highest levels. Ford’s high-profile decision and utter lack of understanding will have to be looked at very carefully by many. This should be seen as a case where Ford is not made to take responsibility for their decisions and hopes no one will hold them accountable. But if they don’t eventually make the step to purchase an electric vehicle, what will they choose?

Alan McKendry is a partner with KPMG LLP in the Automotive industry group, and Robert Lawrence is the vice president and global industry leader of the Manufactured Car segment for Deloitte, LLP in the Americas.

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