Elon Musk said that Tesla may construct 10 to 12 new factories in the upcoming years during the recent Tesla Cyber Rodeo, also known as the annual stockholder meeting. When someone in the crowd yelled, “Canada! I am part Canadian, Musk claimed. Maybe I ought to.
According to today’s TechCrunch article, Tesla recently updated its registration with the Office of the Integrity Commissioner of Ontario to include plans for working with the state to find potential locations for an industrial and/or advanced manufacturing facility. According to Tesla, Ontario could become more competitive and better able to draw in capital investment if it built a new factory called Giga Ontario.
Ontario, which is located right next to Detroit, already has a robust automotive industry made up of manufacturers and suppliers. There are already factories there for Ford and General Motors, and in April the Canadian government committed around $415 million into two new General Motors facilities, one of which would make electric delivery vans for the company’s new Brightdrop division.
Vic Fedeli, Ontario’s minister of economic development, job creation, and trade, said in a statement provided to TechCrunch that by making Ontario a competitive business environment, including lowering the cost of doing business by $7 billion annually, we have attracted nearly $16 billion in investments in electric vehicle technology in the last 20 months. We are establishing a whole supply chain right here in Ontario, and we anticipate that additional businesses from across the world will choose this province as a location for expansion and investment.
AFFECTIVE POLICY No one is certain how the soon-to-be-enacted Inflation Reduction Act of 2022 will affect the auto sector, but its emphasis on North American production may play a role in Tesla’s quest for a new factory to supplement its current operations in Fremont and Austin. There’s no doubt that having a manufacturing in Ontario would make it simpler for Tesla to deliver cars to consumers in Canada and the northern US states.
However, the restrictions the new law imposes on batteries made with materials or components obtained from China will still apply to vehicles built in Canada. Tesla recently signed a contract to purchase nickel from Indonesia for $5 billion, however the suppliers of the nickel are Chinese firms. Will that conflict with the new limitations? In actuality, nobody is entirely certain at this time.
The fact that the Canadian automobile industry is strongly unionized is another issue that Tesla needs to be aware of. Even though Elon has a strong dislike for labor unions, he would be constructing a new plant in the center of a society where unions are the rule rather than the exception. That makes me think of the proverb, “Be careful what you wish for.” You might be successful.
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