This headline was in the Globe and Mail today:
Very bad news for the Canadian automotive industry. Many Canadians are blaming their government: an uncompetitive taxation system, high costs for energy and a burdensome regulatory environment.
Why is GM shutting down Oshawa? To focus on autonomous and zero-emission vehicles. And probably to relocate manufacturing activities from a higher cost country to a lower cost country.
It is too easy in North America to be isolated from what is happening around the world. For example, did you know that China announced a ban in 2017 on all production and new vehicle sales of gasoline and diesel by 2040?
And they are not alone.
Here is a current list of the bans that have been announced worldwide:
The auto industry is pouring billions into ramping up the production of electric vehicles in response to the bans that governments are imposing on gasoline and diesel vehicles. I’ve read estimates of roughly $100 billion with the expectation that 40 to 50 percent of all new production will be electric by 2040. Electric vehicles are less than 3 percent of the global market today. Here is one article about the upcoming changes to the automotive industry from an investor’s perspective.
Both the Canadian and U.S. governments have been rather silent on the banning of fossil fuel vehicles. There have been attempts by lobby groups to get the North American governments to impose bans at a national level. Even an online petition.
How possible would it be to pivot the automotive industry in 15 to 20 years? For most of the politicians ushering in these bans, they likely won’t be around to see them implemented. It’s also very difficult to predict how the technology will change over the next two decades. Likely these dates are soft dates intended to get an industry to focus on moving beyond conventional combustion engines.
I may well see a time when fossil fuel cars are no longer allowed to operate within large North American cities. It is already starting to happen in some cities in Europe.
Lorraine and I have not decided on our timing to change our coach. It seems, at least with what we have been seeing in our network of friends, that some owners of high-end motorhomes change their coaches frequently. As in every year or two. I suspect that within ten years, the decision to change a coach will be influenced by the actions of government on fossil fuels. The cost of diesel fuel may well become prohibitive and the RV industry will have to respond with a cost-effective alternative.
Regardless of whether you accept or deny climate change, fossil fuels appear to be on their way out. Perhaps even during my lifetime.