On the Horizon: KPMG report says industry should prepare for ‘dramatic change’ amid electrification

Toronto, Ontario — Canada’s automotive industry needs to brace itself for massive transformation over the next decade to remain a key driver in the country’s economy, says a new KPMG report.

Released to coincide with the 2020 Canadian International AutoShow, the KPMG report titled Canada’s automotive future: Next-generation vehicles will change the industry as we know it, explores the state of the industry, what the future holds in terms of Canada’s roles in manufacturing, workforce recruitment, infrastructure and electric vehicle battery technology.

“The change is going to be dramatic, even in the next five years,” says Peter Hatges, partner and national automotive sector leader for KPMG in Canada. “Canada can really play a leading role in this transformation.”

Canada’s role in design and manufacturing

For the manufacturing sector, KPMG says Canada has established itself as “an ideal place for EV design and manufacturing, given  the country’s existing automotive expertise.” Ontario alone has more than 200 companies currently committed to developing connected and autonomous vehicles, but the report says the province will need to cut red tape in order to attract new jobs and further investments.

“The province should continue to introduce accelerated approval pathways for developing the next generation of vehicles and thus, demonstrate its willingness to lead,” says KPMG.


KPMG says the industry should expect an increased demand for well-trained engineering and technical workforces specializing in robotics, AI, sensors, telecommunications, new materials and advanced manufacturing processes. 

“The new breed of cars are basically computers on wheels,” said  Peter Hatges, partner and national automotive sector leader for KPMG in Canada. “Yes, we may lose jobs in manufacturing, but we’ll gain them in tech. There will never be a substitute for know-how.”

With more than 350 automation and robotics companies currently positioned in Canada, KPMG says the nation’s AI capabilities are particularly strong, and the country is well-positioned to produce the “auto worker of the future”—as long as industries, educational institutions and governments can collaborate to ensure the industry’s needs are met.  


As for infrastructure, the report stresses the need for continued investments in Canada’s EV charging capabilities and urges governments to get out ahead of demand and expect the incoming infrastructure.

With consumers being accustomed to fuelling their cars almost anywhere, KPMG says the nation has yet to build up enough capacity to provide similar convenience for electric cars.

“There are currently roughly 7,700 public charging stations in Canada, of which only about 500 are ‘Level 3’—the type capable of producing a full charge in about 20 minutes,” says the report. “A ‘Level 2’ charge takes several hours, but the stations cost 100 times less to install.”  

Battery technology

The report also looks at the ongoing question of what variety of EV battery will ultimately win out⁠— lithium-ion or hydrogen fuel cell⁠—and what it will mean regarding the overall cost and performance of EVs.

“Whichever battery comes out on top, the shift to EVs will spur significant demand for certain metals and minerals,” reads the report. “To sustain the current growth of lithium-ion batteries, the industry will need 30,000 more tonnes of cobalt and 81,000 more tonnes of lithium per year by 2021.”

KPMG also said that batteries typically make up about a third of an EV’s total cost today, but that price is expected to drop to 20 percent of an EV’s total cost by 2025. 

“How we build cars, how they’re supplied, what components go into them, how we maintain them⁠—these will all be completely overhauled,” said Hatges. “The change won’t happen overnight, but the industry as we know it⁠ will be turned upside down. It’s like going from horses and buggies to cars⁠—everything is going to be different.”

To download the full KPMG report, click here.

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