In keeping with a commitment made to Canada’s Unifor union during contract negotiations in 2020, Ford Motor Co. announced on Tuesday that it will begin retooling its sport utility vehicle assembly plant in Oakville, Ontario, to produce electric vehicles in 2024.
According to company representatives speaking on a conference call on Tuesday, Ford intends to start renovating the Oakville complex in the second quarter of 2024, which will put the majority of the factory’s production workers on leave until the new EV assembly system begins operating in late 2024.
According to Dave Nowicki, Ford’s head of manufacturing operations for electric vehicles, the 70-year-old site will receive a new battery pack assembly operation as part of the $1.8 billion (US$1.34 billion) renovation.
The five EV vehicles that were agreed upon with Unifor during the 2020 contract negotiations will not be assembled at the facility, according to Ford executives.
Ford Edge and Lincoln Nautilus SUVs are now produced in Oakville. The facility renovation is a component of a $50 billion investment plan through 2026. Jim Farley, the chief executive of Ford, has stated that the company will be able to produce 2 million EVs globally by 2026.
What changes are coming to Ford Oakville plant
Located 60 kilometres west of Toronto and slightly over 487 acres in size, the Oakville Ford facility has a view of Lake Ontario.
There are currently three body shops, one paint building, and one assembly building where about 3,000 people work.
The site will also house a 407,000-square-foot battery pack assembly facility after the renovation. According to Ford, the battery cells and arrays that are put together in Oakville are sourced from BlueOval SK Battery Park in Kentucky. It is unknown how many new jobs the plant renovation will create or what kind of EVs it will produce. Electric Autonomy has previously reported that at least five EVs will be produced in Oakville in 2020. Unconfirmed accounts from more recent times, however, imply it might be lower.
According to Lana Payne, president of Unifor National, “Ford’s commitment to invest in OAC retooling and upskilling signals a bright future for Canadian EV production and for employment in the auto sector.” This week’s news.
A lithium iron phosphate battery factory will be built by Ford in Marshall, Michigan, with manufacturing set to begin in 2026. The corporation is also retooling or building new factories in Europe and the United States.
“Canada and the Oakville complex will play a vital role in our Ford+ transformation. It will be a modern, super-efficient, vertically integrated site for battery and vehicle assembly,” Ford president and CEO, Jim Farley said in a statement.
EV sales struggling in Canada
Even though more and more people are preferring to drive electric than ever before, the transition to electric vehicles appears to be more challenging in Canada than in other wealthy nations. In the first half of 2022, EV sales in the nation increased by 30%, but one report claims that this is insufficient for Canada to stay up with other parts of the world where the shift is occurring more quickly.
According to the Canadian Automobile Association, there are currently 80 battery-electric vehicles available for purchase in Canada, with an average price of $82,000 CAD. Although a vehicle’s base price must exceed $55,000 in order to be eligible, EV buyers do receive a $5,000 state refund.
British Columbia and Quebec also offer state discounts, and this is seen in the higher-than-average EV sales in these two provinces. In fact, a whole 13 percent of new automobiles purchased in British Columbia in H1 2022 were electric, which is significantly higher than the national average. Ontario is in third place at 5.5 percent, well behind Quebec (11.4%) and Ontario (11.4%) (the state had an EV incentive program, but it was stopped in 2018).
In Canada, a record 86,032 electric vehicles were registered in 2021, accounting for only 5.3% of all new vehicle registrations.
EV affordability in Canada
Even though Canadian Federal Government is pushing for more EV sales, Canadians are not impressed with initial buying cost and range of EV’s. With the average price of $82 000, buying an electric vehicle remains to be an option for just a minority of Canadians. That kind of money is simply a wishful thinking for majority in todays un-affordable Canadian daily life. High housing prices, unaffordable mortgage rates, skyrocketing rental prices and other increase in every day expanses, Canadians simply don’t have enough money to go with the federal government agenda.
Affordability is one big issue among Canadians, another big decision maker is the range and practicality of EV’s. Canada is famous for service sector economy and one of the biggest service sector branches are small businesses who need to drive long distances or carrying and towing big payloads. For example, contractors and delivery services have no choice but to go with internal combustion vehicle. There are simply not enough powerful EV’s with enough payload and range capability to attract Canadian small business owners.
Ford’s decision to convert Oakville assembly plant into producing electric EV’s will certainly hire more people for time being in compliance with governments regulations to mandate EV’s in the near future, the question arrises: Who is going to buy so many EV’s produced at unaffordable price?