The Auto Industry Will Change More in the Next Decade Than in the Last 50 Years
- The auto industry is aiming to become carbon neutral by 2040 or 2050, which is going to drastically transform mobility. This requires huge investments in R&D around electrification, digitalization and connectivity, which are the kinds of high-value contributions Canada can make toward the transition.
- The government must create clear regulations and targets for the auto industry throughout Canada. It can also speed up the mass adoption of electric vehicles by establishing a single charging standard that would enable the development of EV charging infrastructure throughout the country.
- Aside from low commercial taxation, minimal red tape and stability, companies look for cities with great talent. So, in order to attract companies, investors and top international talent, Canadian cities need to appeal to young talent by offering a high standard of living at affordable rates.
When it comes to positioning Canada as a global leader in the automotive industry of the future, it is crucial for the government to directly consult industry players as early as possible in the regulatory and legislative process. Canada’s public sector as well as industry need to share a common vision for the automotive world of the future.
What is your vision for the future of the auto industry?
The auto industry is facing a huge transformation right now. Some people say that the auto industry will change more during the next 10 years than it has in the last 50 years, and perhaps even the last century. We will move progressively from a very traditional ownership-based combustion engine industry with mobility that is primarily focused on the car to a more electrified, digitalized and connected industry where other services like shared cars, shared shuttles and autonomous mobility will also play a significant role.
“We will move progressively from a very traditional ownership-based combustion engine industry with mobility that is primarily focused on the car to a more electrified, digitalized and connected industry.”
For Porsche, the most important change at the moment is electrification. We are targeting a maximum use of renewable energies, which means responsible transportation, even in the sports car segment. Of course, we still put in lots of resources into traditional combustion engines, but we are also working very hard to create the first purely electric vehicle (EV) with the Porsche crest on the front hood. This car will be very exciting because it will be a real Porsche with zero emissions. Our 800-volt charging technology can recharge 80% of the car’s battery capacity within 20 minutes with a 350 KW charging station. That means we can recharge up to approximately a 400 km range in a short time. This gives drivers and owners the opportunity to use their electric car not only to drive within the city or in their local region, but also over long distances.
How can Canada’s policy framework encourage the transition to electric vehicles?
Firstly, it is crucial for the Canadian government to consult directly with the automotive industry as early as possible in legislative and regulatory processes. We share the same goals as governments and regulators, and we want to offer innovative and sustainable mobility solutions to our customers.
The auto industry faces immense challenges because regulations vary from one province to another. There is a need for consistent regulations, and clear and achievable targets to move forward with electrification. At the policy level, one of the most helpful steps would be to establish a single charging standard. The creation of an effective charging infrastructure will also allow for the rapid rollout of EVs. The government should ideally be pushing for charging infrastructure instead of subsidizing new cars.
“The auto industry faces immense challenges because regulations vary from one province to another. There is a need for consistent regulations, and clear and achievable targets to move forward with electrification.”
Porsche is working hard to develop charging infrastructure that would allow cars enabled with our 800-volt technology to charge rapidly. We have created a company in Canada called Electrify Canada, which aims to build a new ultra-fast EV direct current (DC) charging network across Canada. It will build 32 charging stations from coast to coast in order to allow users to drive across Canada with ease and speed.
What is most powerful in terms of driving our transition to a zero-emission auto industry: consumer demand or policy incentives?
I would not say that the auto electrification transition is primarily driven by consumer demand; the government and regulators are the main drivers of this change. Consumers have habits and are used to their traditional cars, which have been more affordable. Having said that, today’s luxury consumer wants to lead by example when it comes to environmental sustainability. In the mainstream segment, other factors such as convenient charging infrastructure, price and range are crucial for the transition.
It is not only about the car, it is about the complete ecosystem. For example, Porsche’s vision about future sports cars does not just mean that that car needs to be powered by electricity, but also that the electricity must be generated sustainably and that the factory building the car is carbon neutral. That should happen during the next decade.
“The auto industry’s green transition is gaining momentum through a mixture of customer demand, government vision and supply-side technological innovation.”
The research required to transition to a carbon neutral auto industry is extremely expensive and time-consuming. Many players are merging or forming partnerships to leverage their larger combined footprint and create synergies. The Volkswagen Group has announced that it will be investing €44 billion in new mobility, electrification, digitalization and connectivity by 2023. It will launch 30 models that range from hybrids to purely electric cars in the next five years. But it can only take these bold steps due to its current market share in the global auto industry.
So, the auto industry’s green transition is gaining momentum through a mixture of customer demand, government vision and supply-side technological innovation.
How competitive is Canada’s auto industry and market globally?
Canada is not the most competitive when it comes to cost-effective mass production, so I think it should concentrate on high-value development. Canada definitely has a role to play in innovation around automobile electrification, digitalization, and connectivity.
Coming to the Canadian market, Porsche has been very successful since it expanded its product line to attract new and growing segments. There is a growing number of Canadians who are considering premium brands because they want an upscale purchase with more exclusivity and the latest technology. Canada has also been growing very fast, so even the luxury segment has been expanding rapidly. That is why you see many Porsches on the street when you visit Toronto today.
As an expat representing a foreign company, how would you assess Canada’s investment attraction potential?
Global investors and companies are looking for stability, competitive taxation and minimal red tape. They are also considering the availability of talent in and around the investment hub to foster growth and innovation. Young talent is often attracted to places with a high standard of living. For example, Toronto is a great city, but it needs to tackle emerging issues such as transportation and affordable housing. Every year, Toronto attracts 60,000 to 70,000 people, so it needs to find a way to accommodate them while maintaining the quality of its facilities and services. Many young entrepreneurs and talented professionals are looking for smart cities. They value work-life balance and do not want to spend an hour and a half in traffic during their commute to work or pay exorbitant rent to live close to work.