3 things BC can do: independent agency, a lot more money, policy and regulatory changes
The BC government’s decision last month to boost its support for electric vehicles by 400 per cent is a smart move. Unfortunately, even with the new funding, the budget is only $4.18 million. If BC wants to seriously play in the EV manufacturing sandbox, and it should, Premier John Horgan has to step up.
In the July 9 press release, Energy Minister Bruce Ralston certainly said the right things: “By supporting innovative companies, we can develop and produce made-in-BC clean technologies, and be a global leader in the growing electric vehicle sector.”
What’s stopping BC from becoming a global EV leader?
According to a 2016 study commissioned by Victoria, a laundry list of constraints including access to capital, lack of an automotive supply chain in BC, manufacturing expertise, competition for highly qualified people, and a poorly defined role for BC Hydro.
The biggest speed bump to developing a BC EV sector, however, isn’t on the list: focus. The government doesn’t have a well thought out, well-executed, well-funded strategy. And given where BC is starting from, way back in the pack, it’s too late to approach EV manufacturing with anything but a laser focus.
What might a BC EV manufacturing strategy look like?
When Canadians think about electric vehicles, they probably think about cars like the Tesla Model S or the Nissan Leaf. That manufacturing opportunity is sewn up by Ontario. In 2018, Canada’s most populous province manufactured 2 million cars and it has a supply chain comprised of more than 700 parts manufacturers. And, thanks to proximity and history, it’s tightly integrated into the North American auto industry.
Josipa Petrunic, CEO of the Canadian Urban Transit Research and Innovation Consortium (CUTRIC), points to the five automakers still building cars in the province, Tier 1 suppliers like Magna International, extensive research and development capacity, and the work many of those companies are doing on electrifying transportation.
“Canada has not missed the opportunity to be a player here largely because the future of automotive innovation and automotive manufacturing is going to be electrified and automated light-duty cars and trucks,” she told Energi Media.
BC isn’t Ontario. But BC does have some competitive advantages. Foremost among them is the internationally significant hydrogen fuel cell sector, led by Ballard.
Companies like Ballard position BC to get in on the emerging medium and heavy-duty commercial EV manufacturing, which is not yet sewn up.
“Compared to passenger electric vehicle (EV) and electric bus penetration levels, the electric truck market is still in its infancy,” says Kelly McCoy, Wood Mackenzie research analyst, who expects US freight truck number to rise from 2,000 last year to 48,000 by 2025, growing exponentially thereafter.
This segment of the industry may not be as sexy or as visible, but for BC, this is where the action is.
But now is not the time for half measures. Other jurisdictions like California – in June the state introduced a commercial truck sales mandate that requires 100% electric trucks by 2045 – have a big head start.
If John Horgan’s NDP government is as serious about being a global leader in the EV space as Ralston claims, then the government must act boldly to build out the sector.
3 things BC can do to make that happen
One, set up an independent agency to invest in EV innovation, technology commercialization, and the development of commercial EV manufacturing in BC. Dr. Sara Hastings-Simon is a researcher at the University of Calgary and an expert on ways governments can foster innovation, including the development of new industries. She points to ARPA in the United States and AOSTRA in Alberta (instrumental in developing the oil sands) as successful examples of government funding agencies to promote innovation.
“There’s a lot of lessons that come out of there about how to provide funding to a broad range of technologies and then allow those technologies to compete,” she told Energi Media. “That’s how you end up with things like lithium-ion batteries.”
Two, spend more money, a lot more. Instead of $4 million, BC should be committing hundreds of millions to move the needle.
For example, the BC government already offers up to $50,000 toward the purchase of medium and heavy-duty, airport, port specialty vehicles, and transit buses. The program even subsidizes cargo e-bikes.
To be fair, this is one of the few programs of its kind in Canada. And the Horgan government recently added another $2 million of funding.
But the small-scale, incremental approach to commercial EV manufacturing and adoption isn’t nearly enough for the government to achieve its aspirations. Premier Horgan and Minister Ralston need to seriously boost their ambitions.
Three, improve provincial policy and regulations – for example, the clean fuel standard, expansion of charging infrastructure, and directing BC Hydro to provide support – to encourage the switch to commercial electric vehicles. Fortunately, BC isn’t yet too far behind.
“Support from [American] policymakers and utilities is just getting off the ground, and fleet operators willing to test this new technology can take advantage of incentive and pilot programs to advance their own electrification goals,” says McCoy.
Giddy up, Premier
The Horgan government intends to electrify much of the provincial economy as part of CleanBC. A generous accounting by the Province estimates EV-related 250 BC companies creating 6,000 full-time equivalent jobs and contributing $600 million to the provincial GDP.
That’s a good start. If freight haulers, couriers, and other commercial trucking companies will be going electric anyway, why not reap the economic benefits of building those trucks in British Columbia?