Canadian auto-sector leaders seem to agree on one thing. 

As ambitious visions clash with tough realities, efficiency will determine which companies make it through 2024 unscathed. 

The sector has been reeling from a sense of “techlash” since late last year, amid labour strikes targeting EV battery plants, General Motors’s Cruise halting operations amid what were supposed to be “golden years” for autonomous vehicles, and stumbles for the SPACs that took many EV startups public. 

Rebounding in 2024 will mean walking a fine line, focusing on goals that will really level up businesses and yield returns, experts said. 

Shortages are easing, but manufacturers face new pressures: Companies like bus maker NFI and collision-repair firm Boyd could benefit from a “healthy backlog” as last year’s supply-chain struggles fade, wrote ATB Capital Markets analysts Chris Murray and Kyle Brock. 

But there are twin challenges ahead for automakers and suppliers, said Irina Im, senior tax manager at RSM Canada. 

Cash-strapped consumers may put off buying new vehicles, while manufacturers must spend more on wages and diversifying their supply chains outside of China, she said. 

While spending is hard for businesses to stomach in a downturn, Im said it’s vital that manufacturers invest in tools that drive efficiency and return on investment, including AI tools like supply-chain trackers, and preparations for the EV transition.

EV adoption may come down to cost: The ATB analysts expect EV and plug-in hybrid adoption to continue growing, but prices must fall to move adoption beyond luxury-car shoppers. RBC economists Robert Hogue and Benjamin Richardson similarly predicted that EV sales will grow in 2024, but warned of potential “climate policy regression” as consumer EV incentives expire in 2025. 

On the flip side, corporate fleet buyers still have growing interest in EVs, said Eric Mallia, vice-president of sustainability solutions at Geotab. As companies do the math on fuel costs and route-planning, he said many are finding parts of their fleet should be electrified. 

Computing power is the new horsepower: Chris Walker, president at Toronto semiconductor-tech firm Untether AI, said automotive computing will need “a big leapfrog in efficiency” in 2024, requiring new technologies like chiplets as automakers try to reduce latency for self-driving vehicles and avoid draining their EVs’ batteries. 

Autonomous vehicles are also training increasingly complex models in data centres, which need efficient chips to avoid tremendous environmental footprints, he noted. 

EVs get political again: We’re already seeing worries bubble up this week from Nissan and GM executives, who told the Financial Times that Donald Trump’s campaign plans would wound the EV sector. The Inflation Reduction Act, which has driven so much investment in the industry, may only face more scrutiny as the U.S. presidential election unfolds. You can read more on that, and other tech-sector predictions from our newsroom, here.

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