Wed, April 24, 2024 at 9:35 AM EDT
Business
Ottawa signs EV deal with Mercedes-Benz and Volkswagen
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TORONTO — The federal government signed separate agreements with Volkswagen and Mercedes-Benz Tuesday that will see the two German auto manufacturers secure access to Canadian raw materials for batteries in electric vehicles.
Prime Minister Justin Trudeau and German Chancellor Olaf Scholz observed the signing ceremony in Toronto at an event hosted by the Canadian-German Chamber of Industry and Commerce.
In a release, Ottawa said these agreements will “help secure Canada’s position as a leading centre of excellence for the manufacturing of electric vehicles and batteries.”
The agreements include Canadian cobalt, graphite, nickel and lithium.
The Volkswagen agreement focuses on deepening co-operation on sustainable battery manufacturing, cathode active material production and critical mineral supply.
The Mercedes-Benz agreement focuses on enhancing collaboration with Canadian companies along the electric vehicle and battery supply chains and supporting the development of a sustainable critical mineral supply chain in Canada.
“(These agreements) could help fund new mine development in Canada, which is beneficial for our mining sector,” BMO mining and metals analyst, Jackie Przybylowski, said in an interview. “Canada generally has a terrific track record for sustainable mining; encouraging mining here will potentially provide sources of cleaner and more ethically sourced raw materials for electric vehicles globally.”
The agreements come one week after U.S. President Joe Biden signed a plan to provide tax credits for electric vehicles produced in North America, not only those built in the United States.
They also follow a string of promised investments by other electric-vehicle manufacturers into the Canadian automotive industry.
More than $13 billion was promised in just eight weeks this past spring to build the needed battery supply chains and shift production from combustion-engine to plug-in vehicles.
That was on top of another $3.5 billion promised in the last four years, including investments to make electric school and transit buses, produce and process critical minerals needed to make batteries, and for research and development facilities.
“There aren’t very many other countries in the world with these minerals that are governed by democracies that actually care about the environment,” Jayson Myers, CEO of advanced manufacturing organization NGen, said in an interview.
Additionally, he thinks the agreements provide “tremendous opportunities for Canadian tech and Canadian manufacturers right across the value chain.”
“It’s not just accessing the supply of minerals. It’s: how do we improve the entire process, and how do we do things much better in a environmentally-sustainable way?” he said.
Speaking in front of business leaders Tuesday alongside Scholz, Trudeau acknowledged the strength of Canada’s mining sector, explaining that the country needs to continue to show that it has the natural resources the world needs, while demonstrating that its mining industry doesn’t have to be incompatible with “progressive values, solid labour laws, care for neighbourhoods and communities” and climate change.
“There is a more pressing need for critical minerals and rare earth elements than ever before, and if we want to demonstrate a world that is cleaner and greener … we can’t continue to accept that our minerals and our inputs into our high-quality way of life need to come from authoritarian countries,” he said.
Joanna Kyriazis, program manager of clean transportation for Clean Energy Canada at Simon Fraser University, said agreements like this show that Canada’s finally capitalizing on its battery supply chain potential and emerging as a dominant player in the electric vehicle battery industry.
But at the same time, might need to pick up the pace.
“Despite being ranked high for its battery supply chain potential, very few of Canada’s metals and minerals are actually making their way into batteries right now,” she said.
“A number of new mines and associated infrastructure will have to be developed if Canada wants to capture any significant electric vehicle battery mineral market share by 2030.”
In its most recent budget, the federal government announced its first-ever critical minerals strategy, allocating $3.8 billion toward manufacturing, processing, and recycling projects, but Kyriazis said more could be done to move the needle faster, such as accelerating mining permitting times while meeting the highest environmental, social and governance standards, including Indigenous consultation and partnership.
“It will likely also require building out mining infrastructure in advance to ensure companies can access new mines plus servicing them with sufficient clean electricity to make good on Canada’s clean battery promises,” she said.
This report by The Canadian Press was first published Aug. 23, 2022.
— With files from Lee Berthiaume
Adena Ali, The Canadian Press
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Business
Oil Firms Doubtful Trans Mountain Pipeline Will Start Full Service by May 1st
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Oil companies planning to ship crude on the expanded Trans Mountain pipeline in Canada are concerned that the project may not begin full service on May 1 but they would be nevertheless obligated to pay tolls from that date.
In a letter to the Canada Energy Regulator (CER), Suncor Energy and other shippers including BP and Marathon Petroleum have expressed doubts that Trans Mountain will start full service on May 1, as previously communicated, Reuters reports.
Trans Mountain Corporation, the government-owned entity that completed the pipeline construction, told Reuters in an email that line fill on the expanded pipeline would be completed in early May.
After a series of delays, cost overruns, and legal challenges, the expanded Trans Mountain oil pipeline will open for business on May 1, the company said early this month.
“The Commencement Date for commercial operation of the expanded system will be May 1, 2024. Trans Mountain anticipates providing service for all contracted volumes in the month of May,” Trans Mountain Corporation said in early April.
The expanded pipeline will triple the capacity of the original pipeline to 890,000 barrels per day (bpd) from 300,000 bpd to carry crude from Alberta’s oil sands to British Columbia on the Pacific Coast.
The Federal Government of Canada bought the Trans Mountain Pipeline Expansion (TMX) from Kinder Morgan back in 2018, together with related pipeline and terminal assets. That cost the federal government $3.3 billion (C$4.5 billion) at the time. Since then, the costs for the expansion of the pipeline have quadrupled to nearly $23 billion (C$30.9 billion).
The expansion project has faced continuous delays over the years. In one of the latest roadblocks in December, the Canadian regulator denied a variance request from the project developer to move a small section of the pipeline due to challenging drilling conditions.
The company asked the regulator to reconsider its decision, and received on January 12 a conditional approval, avoiding what could have been another two-year delay to start-up.
Business
Tesla profits cut in half as demand falls
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Tesla profits slump by more than a half
Tesla has announced its profits fell sharply in the first three months of the year to $1.13bn (£910m), compared with $2.51bn in 2023.
It caps a difficult period for the electric vehicle (EV) maker, which – faced with falling sales – has announced thousands of job cuts.
Boss Elon Musk remains bullish about its prospects, telling investors the launch of new models would be brought forward.
Its share price has risen but analysts say it continues to face significant challenges, including from lower-cost rivals.
The company has suffered from falling demand and competition from cheaper Chinese imports which has led its stock price to collapse by 43% over 2024.
Figures for the first quarter of 2024 revealed revenues of $21.3bn, down on analysts’ predictions of just over $22bn.
But the decision by Tesla to bring forward the launch of new models from the second half of 2025 boosted its shares by nearly 12.5% in after-hours trading.
It did not reveal pricing details for the new vehicles.
However Mr Musk made clear he also grander ambitions, touting Tesla’s AI credentials and plans for self-driving vehicles – even going as far as to say considering it to be just a car company was the “wrong framework.”
“If somebody doesn’t believe Tesla is going to solve autonomy I think they should not be an investor,” he said.
Such sentiments have been questioned by analysts though, with Deutsche Bank saying driverless cars face “technological, regulatory and operational challenges.”
Some investors have called for the company to instead focus on releasing a lower price, mass-market EV.
However, Tesla has already been on a charm offensive, trying to win over new customers by dropping its prices in a series of markets in the face of falling sales.
It also said its situation was not unique.
“Global EV sales continue to be under pressure as many carmakers prioritize hybrids over EVs,” it said.
Despite plans to bring forward new models originally planned for next year the firm is cutting its workforce.
Tesla said it would lose 3,332 jobs in California and 2,688 positions in Texas, starting mid-June.
The cuts in Texas represent 12% of Tesla’s total workforce of almost 23,000 in the area where its gigafactory and headquarters are located.
However, Mr Musk sought to downplay the move.
“Tesla has now created over 30,000 manufacturing jobs in California!” he said in a post on his social media platform X, formerly Twitter, on Tuesday.
Another 285 jobs will be lost in New York.
Tesla’s total workforce stood at more than 140,000 late last year, up from around 100,000 at the end of 2021, according to the company’s filings with US regulators.
Musk’s salary
The car firm is also facing other issues, with a struggle over Mr Musk’s compensation still raging on.
On Wednesday, Tesla asked shareholders to vote for a proposal to accept Mr Musk’s compensation package – once valued at $56bn – which had been rejected by a Delaware judge.
The judge found Tesla’s directors had breached their fiduciary duty to the firm by awarding Mr Musk the pay-out.
Due to the fall in Tesla’s stock value, the compensation package is now estimated to be around $10bn less – but still greater than the GDP of many countries.
In addition, Tesla wants its shareholders to agree to the firm being moved from Delaware to Texas – which Mr Musk called for after the judge rejected his payday.
Business
Stock market today: Nasdaq futures pop, Tesla surges after earnings with more heavyweights on deck
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Tech stocks rose on Wednesday, outstripping the broader market as investors welcomed Tesla’s (TSLA) cheaper car pledge and waited for the next rush of corporate earnings.
The Nasdaq Composite (^IXIC) rose roughly 0.6%, coming off a sharp closing gain. The S&P 500 (^GSPC) was up 0.2%, continuing a rebound from its longest losing streak of 2024, while the Dow Jones Industrial Average (^DJI) fell 0.1%.
Tesla shares jumped nearly 12% after the EV maker’s vow to speed up the launch of more affordable models eclipsed its quarterly earnings and revenue miss. That cheered up investors worried about growth amid a strategy shift to robotaxis and the planned cancellation of a cheaper model.
The results from the first “Magnificent Seven” to report have intensified the already high hopes for Big Tech earnings, that the megacaps can revive the rally in stocks they powered. The spotlight is now on Meta’s (META) report due after the market close, as the Facebook owner’s shares rose after the Senate voted for a potential ban on rival TikTok. Microsoft (MSFT) and Alphabet (GOOG) next up on Thursday.
Meanwhile, Boeing (BA) reported better than expected first quarter results before the opening bell with a loss per share of $1.13, narrower than the $1.72 estimated by Wall Street. Shares rose about 2% in morning trade.
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