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“America’s Jobs And Growth Are At Stake”
Ronald Reagan giving his 1987 speech
I find myself saying things in 2025 that I never thought I would say.
This week, the thing I’m saying is, Ronald Reagan was right!
If you haven’t heard or watched the entirety of Reagan’s 1987 radio address, and you live in North America, and have any association with the automotive industry, you should really take a thorough listen to what he had to say.
He wasn’t explicitly talking about cars, but Reagan’s words might be more true today than they were in the 80s.
“You see, at first, when someone says, “Let's impose tariffs on foreign imports,” it looks like they're doing the patriotic thing by protecting American products and jobs. And sometimes for a short while it works -- but only for a short time.”
- Ronald Wilson Reagan (40th President of the United States)
It sucks that The Donald’s reaction to an ad paid for by Dougie Ford and the Ontario government featuring Reagan’s radio address has resulted in an additional 10% tariff on goods imported into the US from Canada.
But I think this really exemplifies The Donald’s fragile ego, that he was compelled to draft trade policy because of a TV ad he didn’t like.
Also, I guess advertising still works, just not always in the way you intend.
Earlier this year, I wrote that I believed Canadian auto manufacturing was already dead.
Canada is on a trajectory to produce around a third as many vehicles as we did at the industry’s peak when we were partying like it was 1999 (because it was 1999).
With the Stellantis production shift announced last week and GM’s announcement to end electric van production at the CAMI plant in Ingersoll, we are much closer to what I described in April.
Among the five OEMs that manufacture in Canada, only Honda and Toyota are at full production capacity.
“What eventually occurs is: First, homegrown industries start relying on government protection in the form of high tariffs. They stop competing and stop making the innovative management and technological changes they need to succeed in world markets.”
- Ronald Wilson Reagan (40th President of the United States)
What I don’t think The Donald fully appreciates, and what Ronald Reagan very clearly explained, is that protectionist legislation destroys prosperity.
By imposing tariffs on the auto industry and trade in general across North America, The Donald is putting the entire North American auto industry at risk.
Although job losses in Canada are likely to be severe, the long-term implications for the US auto sector are even more dire.
The Carney government has already done the math on projected job losses. It allocated a budget back in September to support retraining up to 100,000 Canadian workers over the next 3 years.
OEMs like Hyundai and Stellantis are planning to invest billions in US production. But without the competitive advantage of lower parts and labour costs in Canada and Mexico, US manufacturers will be hard-pressed to build affordable vehicles.
GM is cutting hundreds of salaried jobs to remain profitable.
Ford is hoping to reinvent its supply chain to build vehicles as inexpensively as Chinese OEMs.
Meanwhile, China, the world’s largest vehicle market, has become the world’s largest vehicle exporter. And they have a stranglehold on rare-earth minerals, magnets, and technology to build cheap EVs.
In some ways, The Donald is basically ceding global automotive dominance to China with the moves he’s making.
He just doesn’t know it yet.
“So, soon, because of the prices made artificially high by tariffs that subsidize inefficiency and poor management, people stop buying. Then the worst happens: Markets shrink and collapse; businesses and industries shut down; and millions of people lose their jobs.”
- Ronald Wilson Reagan (40th President of the United States)
US vehicle prices are already at their highest point in history. Average new car prices rise above $50,000 for the first time.
And tariff impacts have barely been felt at US dealerships because the OEMs are absorbing those tariff costs for American consumers.
The automotive industry accounts for over 10% of intraregional trade in North America, equating to hundreds of billions of dollars in cross-border trade flows and millions of jobs.
The Donald’s uneducated meddling in the industry is putting the entire sector at risk.
This will hurt Canada in the near term.
But it will hurt the US even more in the long run.
China’s Automotive Expansion
Great Wall Motors still wants to enter the US EV market. mashable.com
Gotion abandoned a plan to build a $2.4 billion plant in Michigan to produce key materials for EV batteries. reuters.com
Chery unveiled a prototype solid-state battery with the highest claimed energy density of any automaker in the world. interestingengineering.com
Must-Know Musk News
Elon says he needs more control over Tesla, as well as a pay package worth nearly $1 trillion, in exchange for building the company’s “robot army.” theverge.com
Elon suggests Tesla could remove the safety monitors from its robotaxis “by the end of the year.” He also said they would launch a robotaxi service in 8-10 new markets before the end of the year. theverge.com
Elon thinks that Tesla’s Optimus robot “will make a great surgeon.” theverge.com
The NHTSA is seeking information from Tesla about a new driver assistance mode dubbed “Mad Max” that operates at higher speeds than other versions. Some drivers report that Tesla vehicles equipped with the more aggressive version of its Full Self-Driving system could exceed posted speed limits. reuters.com
SpaceX’s Starshield satellites are reportedly transmitting signals on unauthorized frequencies. engadget.com
SpaceX’s most important customer is officially unhappy with the company’s trajectory toward returning American astronauts to the Moon, which may lead to one of Elon Musk’s most hated rivals getting that business instead. pcmag.com
Rise Of The Machines
Nike Project Amplify
Nike announced Project Amplify, “the world’s first powered footwear system.” Similar to e-bike pedal-assist features, Project Amplify uses robotics to boost running and walking speeds. theverge.com
Amazon hopes to replace 600,000 US workers with robots. Job losses could shave 30 cents off each item purchased by 2027. theverge.com
Teledyne Marine’s Redwing autonomous underwater robot begins its mission to become the first ever to travel around the world by itself. teledynemarine.com/sentinelmission
Energy
Russia’s coal collapse marks the breaking point of the fossil era. With thermal-coal prices down nearly 80% from their 2022 peak and over half of Russia’s producers now losing money, Moscow’s lifeline industry is imploding. forbes.com
US demands EU reverse new climate rules to allow surge in gas imports. theguardian.com
Citigroup’s senior commodities strategist Eric Lee told Bloomberg that a Russia-Ukraine de-escalation could “precipitate a faster move” toward the bank’s bear-case scenario of Brent crude dropping to $50 a barrel. oilprice.com
Redwood Materials raises another $350M to power up its energy-storage business. techcrunch.com
Wireless EV charging reaches up to 97% efficiency. autoblog.com
Researchers propose turning streetlights into EV chargers. newatlas.com
But Wait, There’s More
Rivian’s TM-B e-bike
Rivian’s first e-bike is unlike anything you’ve ever seen. theverge.com
Rivian laid off another 600 workers. wsj.com
Rivian agreed to settle a 2022 class-action lawsuit by paying $250 million to some shareholders who had alleged the electric vehicle maker defrauded investors over vehicle prices when it went public. reuters.com
Amazon wants to buy ‘thousands’ of Rivian’s pedal-assist cargo bikes. theverge.com
GM plans to ditch Apple CarPlay and Android Auto across all its vehicles (not just electric ones). theverge.com
GM says hands-free, eyes-off driving will be offered on the 2028 Escalade IQ. The new Level 3 autonomous system will work across all highways in the US. theverge.com
Ford halted production of the F-150 Lightning. carscoops.com
VW halted production of the ID.Buzz. autoblog.com
Nissan weighs the feasibility of importing US-built Murano and Pathfinder nameplates into Japan. autonews.com
Self-driving startup Wayve is in talks to raise $2 billion from Softbank and Microsoft. forbes.com
Riley Walz, a 23-year-old software engineer, orchestrated what he dubbed the “world’s first Waymo DDoS” by coordinating 50 people to simultaneously order Waymo self-driving cars to San Francisco’s longest dead-end street. The prank highlighted vulnerabilities and risks in autonomous vehicle systems to coordinated human actions. autoblog.com
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