Canada’s Comeback Charge

If anyone thought that Canada – home of hockey, where losing a few teeth during the course of the game is a minor inconvenience – was going to relinquish any of its stake in the North American automotive landscape without a fight, they were sorely mistaken. 

On May 2, Stellantis announced that it plans to convert its Windsor and Brampton assembly plants to produce hybrid and battery electric vehicles (BEVs) by 2025. The federal government of Canada and the government of the province of Ontario are aiding the effort, contributing US$411 million and US$398 million, respectively, to the project. Including the government investments, Stellantis plans to invest US$2.8 billion in total into its Canadian operations.

Prior to the announcement, the fate of the two Stellantis plants was in the balance. The automaker has announced that Windsor will cut down to one shift at the end of the year, as demand and chip supply woes for its Chrysler Pacifica and Voyager minivans put pressure on the plant’s utilisation rate. Brampton was seemingly left for dead, with the next-generation Dodge Charger and Challenger expected to move to the Belvidere, Illinois, plant where they would move to the flexible STLA platform – which offers both ICE and EV options – in 2024. To make room for these models, the Jeep Cherokee, which is currently produced at the Belvidere plant, is expected to move to Stellantis’ Toluca plant in Mexico, where it will be built alongside two other yet-to-be-named new Jeep SUVs.

And so, instead of being saddled with potentially out of date ICE coupes, sedans and minivans, the future looks brighter for a country where things seemed precarious only a few years ago. Looking back only as far as 2020 – and prior to the last Unifor contract signing – there were real question marks regarding the future of these two Stellantis plants, along with GM’s Oshawa facility and the Oakville plant for Ford. 

But since then, Stellantis, GM and Ford have all said yes to Canada as a key partner in their electric vehicle journey. Couple that with continued investment from Toyota and Honda – the number one and two Light Vehicle producers in the country – and we see that the building blocks for Canada’s resurgence are certainly there.

However, that may take years to materialise and is partially dependent on the consumer’s thirst for EVs. With this latest announcement, we see output in Canada growing to 1.6 million vehicles by 2027 – above our previous expectations, but still below 2019’s pre-pandemic level of 1.9 million. 

Considering the potential alternative, the announcement from Stellantis and the investment from other automakers at least keep Canada’s game moving along and gives its auto industry a fighting chance.