Windsor adopts US change of course on electric vehicle incentive that excluded Canadian vehicles | Radio-Canada News

The U.S.’s move away from a tax incentive that excluded Canadian-made electric vehicles is sparking optimism in Canada’s auto capital.

“This is great news for Canadian workers and for our industry,” said Dave Cassidy, President of Unifor Local 444. The union represents workers at the Stellantis plant in Windsor, Ontario, where a hybrid electric vehicle, the Chrysler Pacifica minivan, is being built. .

Cassidy is among many in the auto industry and the Windsor-Essex area who welcome the news that under proposed legislation U.S. consumers could buy Canadian-made vehicles while enjoying discounts. .

The initial plan, which only included vehicles made in the United States, was the subject of anxiety and lobbying efforts by industry on the Canadian side of the border.

The Stellantis Windsor assembly plant in Windsor, Ontario is shown in a file photo. (Chris Ensing/CBC)

The $7,500 credit for “clean vehicles” — which includes battery electrics, plug-in hybrids and hydrogen fuel cells — is among $369 billion in new spending on energy-related projects and to the climate included in the bill on reducing inflation belatedly announced on Wednesday.

US Senator Chuck Schumer and Senator Joe Manchin, both Democrats, reached an agreement to include the credit and a series of other tax and investment initiatives aimed at developing the clean energy sector and stimulating the adoption of electric vehicles in the bill.

But, as Cassidy pointed out, the bill is not a done deal. Schumer said the US Senate is expected to vote on the bill next week, and then it will go to the Democratic-controlled House of Representatives.

“Existential threat” to the Canadian sector

Flavio Volpe, president of the Automotive Parts Manufacturers Association of Canada, is one of those involved in efforts to get the US government to reconsider the Buy American element of the policy.

He said the Canadian auto sector manufactures about two million vehicles a year⁠, about 85% of which are destined for the US market.

The abandonment of the policy means that billions of dollars of recent automotive investment, in Canada and specifically in Windsor-Essex, can “hit the track and start to take off”, he said.

Stellantis has big plans for electric vehicle production in Windsor and Brampton, announcing a $3.6 billion plan to retool and modernize factories.

Marco Veliz Castro is a PhD student at the University of Windsor studying electric vehicles. (Jacob Barker/CBC)

It is also partnering with LG Energy Solution for a $4.9 billion electric vehicle battery plant that is expected to be operational by 2024.

“If this US tax credit came as originally proposed, I think it threatened…the accumulation and existence of these investments,” Volpe said.

“I think Stellantis and LG made an educated guess and bet on Windsor.”

Change could drive innovation

Marco Veliz Castro, a second-year PhD student in electrical engineering at the University of Windsor, studies electric vehicles and works on powertrains.

“I see a lot of future in this industry so I wanted to specialize in this area to further develop the Canadian automotive industry,” he said.

Under Canada’s Zero-Emission Vehicle Incentive Program, the maximum rebate is $5,000. (Darrin DiCarlo/CBC)

He said while the old policy would have undermined Canada’s efforts to manufacture electric vehicles, including Canadian-produced vehicles in the incentive could help spur innovation.

“We work a lot with industry partners and so these incentives would further stimulate the electric vehicle industry, so [we] would likely see further strengthening of our partnerships with our existing partners, and also potentially new opportunities,” he said.

It’s not just the removal of the “Buy American” portion of the bill that is generating a positive reaction.

Rakesh Naidu, president and CEO of the Windsor-Essex Regional Chamber of Commerce, pointed out that the policy also includes billions in incentives for American companies to retool and set up vehicle manufacturing facilities. electrical.

It could also be good news for Windsor-Essex.

“We are in a tightly integrated industry where products cross the border many times and where Ontario and Canada [are a] very important and very vital part of this supply chain,” he said.

“So as long as [United States-Mexico-Canada Agreement] rules apply and Canadian industry is given a fair chance to offer their products and offer their components, we will be very positive about any news of incentives, because what they do is really propel the industry forward. »

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