In the past half-decade, General Motors Canada’s software and R&D team has grown from less than 200 people to “well over 1,000,” says David Paterson, GM Canada’s vice-president of corporate and environmental affairs. It’s a key part of a larger innovation strategy for the Chevy and Cadillac maker’s Canadian outpost, one the company believes will fortify the future of its manufacturing investments.

In an interview with The Logic, Paterson said the expansion of the software team and the growth of the company’s Canadian Technical Centre in Markham, Ont.—a “major operation”—also underpin its electric-vehicle battery ambitions with their work on proprietary software that heats and cools the batteries. The company’s BrightDrop commercial electric vans, being made in Ingersoll, Ont., also include their own software system.

Why it matters: Like many old-school auto companies, GM is in a precarious moment, spending a planned US$35 billion to mount one of the biggest technological transitions in its history amid supply-chain issues, a pandemic and a climate emergency, and in the face of fierce competition from emerging rivals like Tesla and Rivian. GM’s EV push comes after a sweeping recall of its Chevy Bolt, which had been seen as a crucial step forward for electric vehicle technology’s range and affordability. 

Workers are also trusting the company to revive an operation in Oshawa, Ont. that about three years ago was the poster child for the perils of a branch-plant economy, after years of consolidation at a site that once employed 23,000 people.

And with Canadian taxpayers’ money being used to back GM’s new manufacturing bets—$259 million each from the provincial and federal levels for GM to upgrade its Ingersoll and Oshawa plants—it’s crucial that Canada’s role in the global automaker’s plans is future-proof. 

The game plan: Like its rivals, GM has announced a spate of manufacturing plans for Canada, expanding its Oshawa operations and adding a second BrightDrop electric-van model to its Ingersoll plant. 

Innovation Minister François-Philippe Champagne said at an event announcing the investment that the government’s agreement with GM includes the company “investing hundreds of millions of dollars” in R&D in Canada.  

The automaker also unveiled plans for a battery-materials plant in Bécancour, Que., which Paterson said was not part of the government funding package announced on April 4, though the Quebec government has said it is in talks to contribute.

The fine print: There are some big changes coming—BrightDrop is “the first new General Motors brand in living memory,” says Paterson, and the idea of a joint venture building battery materials is also relatively new to the company. GM needs a vision to pull them off.

Paterson said there have been 2,600 postings or new hires for the Oshawa plant since it was retooled last May, with some left to fill in anticipation of a third shift to be added this summer. GM will build the internal combustion-powered Chevy Silverado there—a type of vehicle the company plans to stop selling by 2035, after which both GM and the federal government have said there won’t be sales of new internal-combustion vehicles in Canada. But, Paterson said, the plant’s role as the only GM plant globally that can switch between heavy- and light-duty pickup trucks will give it more flexibility to adjust to changes in the market, as it has done already with its super-fast revamp over the past year. 

Paterson also noted that the company’s Canadian R&D facilities include a track to test algorithmic driving and safety features. GM Ventures has backed the Montreal computer-vision startup Algolux, and Canada is home to one of the investment arm’s offices focused on investing in specific geographic locations, alongside those in Israel, Detroit and Silicon Valley. Ted Graham, GM’s Canada-based head of open innovation, announced he would be a principal for the fund.

What’s next: Paterson said the Quebec battery-materials plant is being designed with room for expansion, making it a space to watch. The BrightDrop CAMI plant will be cleaned out and fitted with new robots and one shift of workers, with the potential to add more, he said.

BrightDrop chief revenue officer Steve Hornyak told The Logic in an interview Wednesday it’s planning to announce several new clients in the grocery business in the coming months as it finalizes versions of its motorized carts, which were originally designed in Canada, to be used as temperature controlled, self-serve “lockers” for grocery-delivery pickups.

Asked how the new brand will avoid the struggles of fellow upstarts like Rivian as it faces off against established rivals like Ford’s E-Transit, Hornyak said BrightDrop is counting on the advantage of having GM as both a “captive VC” and exclusive contract manufacturer.

One shadow over recent Canadian auto investments has been a U.S. proposal to have the country’s consumer incentives for EV purchases favour U.S.-made vehicles. Paterson said that the two countries need to harmonize their incentives and regulations so GM can take advantage of its North America-wide scale, but in the short term, “we’ve never had a worry about [the bill] with regard to our investments in Canada,” since BrightDrop isn’t a consumer product and the internal-combustion pickups made here wouldn’t be directly affected. 

GM has “signed up to maintain and grow our capability, engineering, software development, testing, all of that” in Canada, Paterson said.