One of the world’s most storied makers of luxury sports cars is speeding into the electric-vehicle race just as the rest of the industry stalls out. Today, we look at the different tracks emerging on the EV circuit.
Making news this morning
- WestJet and unionized mechanics agree to resume talks; strike action off the table
- Bank of Canada considered holding off interest rate cuts until July
- Temporary residents in Canada rise to 2.8 million ahead of government restrictions
Travelling
Grounded
WestJet Airlines cancelled flights after the union representing 670 aircraft technicians said it could strike tonight. Overnight, the threat of strike action was dropped after both sides agreed to return to the bargaining table.
What happened: As Eric Atkins reports, the disruptions come on the eve of the busy summer travel season, when airplanes are full and ticket prices high. The recent failure of Lynx Air also means travellers have fewer choices.
The WestJet workers, who include maintenance engineers and skilled tradespeople, last week rejected a tentative agreement by 97 per cent. The company called the vote “deeply concerning,” and asked the Canadian Industrial Relations Board to step in and arbitrate the first collective agreement between the two sides.
My wallet hurts: You’re not alone. Travellers are paying more to fly domestically during peak tourism season compared with last year as production problems, competition and industry consolidation lift prices skyward.
Electric vehicles
In a slowdown, speeding up
Pictured: Not a fully electric Ferrari. Nice, though.CYRIL ZINGARO/The Associated Press
Tomorrow morning, in the northern Italian town of Maranello, Ferrari chief executive Benedetto Vigna plans to open the doors to a new facility at the centre of its electric ambitions.
It is from this “e-building,” announced to investors at Ferrari’s annual general meeting in April, that the luxury sports carmaker plans to roll out its first fully electric vehicle late next year.
At a reported starting price of about €500,000 (more than $730,000) – plus up to 20 per cent more if you want any of the bells and whistles – that’s $200,000 more than the average sale price of a Ferrari and far exceeds rivals in the luxury electric market.
But Ferrari has built its name partly on exclusivity and is betting its wealthy clientele will help propel the company through the problems plaguing newer entrants in a volatile global market. Whether that bet pays off remains to be seen, but to prove at least more financially sound than the Michael Mann biopic, it will have to steer through a flurry of caution flags.
Stalling out
Many of the high-profile EV startups to go bankrupt in recent months were worth potentially billions to investors not so long ago, but the economic road they started out on was much smoother.
From startup to finish This week, almost four years after a deal to go public valued the company at US$2.9-billion, Fisker Inc. filed for bankruptcy protection. It joins a long list of former investor darlings that followed roughly the same track in their bid to take on the Big Three and Tesla: Lordstown Motors, Electric Last Mile Solutions and Proterra, to name a few.
Speed bumps It isn’t just the startups feeling the burn. Ford is slowing its production plans in Canada, and General Motors is abandoning some EV goals. Most of these decisions are being driven, the companies say, by softening demand and lower sales. Recent reports from JD Power, Deloitte and Autotrader show consumer interest in EVs is falling year over year.
Global grudges Protectionist battles are playing out up and down the industry. On Wednesday, Chinese automakers asked Beijing to fight back against Brussels’ plan to hike tariffs on imported Chinese-made EVs. And earlier this month, America’s largest oil industry group filed a lawsuit to block President Joe Biden’s push for half of all car sales to be electric by 2030.
But revving up
Look under the hood a little closer and you can see plenty of reason for optimism in the industry.
Accelerating sales A recent report from the International Energy Agency forecasts growing sales in major parts of the world regardless of how much light is given to slowing company projections or headline-grabbing falls from grace.
Among its predictions:
- EV sales will hit 17 million this year, compared to 14 million in 2023. More than one in five of those cars sold will be electric.
- 10 million of those sales would be in China.
- By 2035, 50 per cent of all cars sold globally will be EVs
We see thee rise Quebec City-based electric vehicle charging tech firm FLO raised millions in new funding to support its push into the Canadian and U.S. markets. Part of the company’s ambition is to improve infrastructure for EVs – a stumbling block for many consumers.
And while it’s not going to move the global needle on EV demand, Jason Kirby observes in his weekly Decoder series, Canadian consumers are still flocking to low-emission vehicles.
A roar no more?
It’s one thing for my car’s descendants to lose its revs and rattles, but what about the roar of the V12 that has driven much of Ferrari’s history? BMW hired Hans Zimmer to incept sound into its EVs. Dodge took the route of amplifying the melodies of its electric motor.
Ferrari is reportedly working on a “sonority current.” (Dibs on band name!)
I don’t want to read the link. A what? Okay, I’ll try my best: A sonority current. It works by measuring the frequencies of mechanical elements like the motor, transmission, gearbox and wheels and creating a sound that rises and falls in relation to those factors.
I don’t follow. Car go zoom!
Was the movie bad? Only at the box office. Globe movie critic Barry Hertz called Ferrari a “propulsive” drama, though it “could’ve used an engine check”
Entrepreneurship
Addressing a gap
Benoit Loyer, a partner and broker at the commercial real estate agency Trillion and member of the Mi’gmaq community of Listuguj in Quebec, said financing for businesses owned by First Nations, Métis and Inuit people can help advance economic reconciliation.ROGER LEMOYNE /The Globe and Mail
Business Development Bank of Canada is committing $250-million in financing, training and investment funding for companies led by Black, Indigenous and female entrepreneurs, Pippa Norman and Jeffrey Jones report.
The funds are aimed at addressing a lingering gap in support for entrepreneurs from underrepresented communities who face obstacles because of systemic racism and discrimination. Despite a dip in the total number of entrepreneurs in Canada, the number of Indigenous and Black-led businesses is on the rise.
By expanding and getting access to some of the funding, we would definitely be able to reach more people and implant ourselves in the rest of Canada.
— Benoit Loyer
Also on our radar
- Employment insurance (Canada)
- New housing price index (Canada)
- Earnings: Darden, Winnebago, Smith & Wesson Brands.
Markets this morning
Global stocks held near record highs, supported by investor confidence in the prospect of a drop in U.S. interest rates this year. As expected, the Bank of England kept its main interest rate unchanged at 5.25 per cent, but gave indications that it may be getting closer to cutting from the 16-year high, boosting British markets.
The pan-European STOXX 600 was up 0.48 per cent in morning trading. Britain’s FTSE 100 gained 0.41 per cent, Germany’s DAX advanced 0.52 per cent and France’s CAC 40 added 0.92 per cent.
In Asia, Japan’s Nikkei closed 0.16 per cent higher at 38,633.02, while Hong Kong’s Hang Seng slid 0.52 per cent to 18,335.32.
The Canadian dollar traded at 72.95 U.S. cents.