What phase of the industry lifecycle model is the “electric car battery” industry in? Support your answer with characteristics of the industry lifecycle stage and explain with all case examples.

You need to read the case first, then answer 5 question after the case

You need to give specific example and deep think for the answer

The answer only focus on the case

Read instructions in the case

When you finish one question upload one question

You only have 2 hours to finish analyze this case.

Requirements: answer 5 question in deep thinking and specific examole from the case

Stellantis: an expansion in Canada

In May 2023, European automaker, Stellantis AG announced it had halted construction of its $5 billion Windsor electric-vehicle (EV) battery manufacturing plant due to a lack of funding by the Canadian federal and provincial governments. The factory was expected to be the first electricvehicle battery plant built in Canada.i A spokesperson from Stellantis said, “the Canadian Government has not delivered on what was agreed to, therefore Stellantis and [South Korean battery-maker] LG Energy Solution will begin implementing their contingency plans.”ii

After a leak that Volkswagen received approximately $13.2 billion to build an EV battery plant in St. Thomas, Ontario, Stellantis wanted more government support, different from its original agreement. iii

The European automaker said it would be willing to step away from the Windsor construction project and lose millions of dollars in set-up costs in order to gain billionsiv more in funding from the U.S. federal government. In 2022, the U.S. federal government implemented the U.S. Inflation Reduction Act which contained financial incentives to encourage electric vehicle companies (and those in their supply chains) to set up their factories in the U.S., encouraging U.S. job creation and economic development. v

In the same year, the U.S. National Highway Traffic Safety Administration opened 3 investigations of safety problems in 1.65 million Stellantis vehicles. One issue was engines staling due to camshaft sensor problems, and another issue was a transmission problem causing Chrysler plug-in hybrid minivans to lose power. No crashes or injuries were reported and investigators said Stellantis was cooperating with the investigation.

Stellantis, one of the world’s largest automakers that made Chrysler, Ram, Fiat and other car brands,vi was considered to be a critical step for Canada moving forward in developing a full electric-vehicle supply chain. In addition to the Volkswagen plant, the establishment of a Stellantis manufacturing plant would help attract a range of related businesses that could mine battery components, manufacture parts, assemble vehicles and recycle batteries. vii

Industry Minister François-Philippe Champagne said ““These large manufacturing facilities, most of them will be decided within the next six to twelve months in North America. So therefore, either you win now, or you’re out of that industry for 50 years or until there’s a new technology.”viii

“The Stellantis plant [had an estimated] annual production capacity of 45 gigawatt hours, which could make enough batteries for more than 400,000 vehicles a year, with the first production happening as early as 2024.” ix The “Volkswagen’s plant, with twice the production capacity, could produce enough [batteries] for nearly a million vehicles annually, with initial production starting in 2027.” x The Volkswagen deal was expected to employ about 3,000 workers.xi

The automotive sector had always been an important part of the Canadian economy that helped provide good-paying jobs for workers, and as a result, helped support their communities. But things now were changing. As the industry was shifting from gas-based vehicles to electric ones, new plants had to be built to accommodate this change in technology. From electric cars, to batteries, and to software technologies to support these vehicles, auto companies across the 4 | P a g e globe were looking to governments for the ‘best financial deal’ before they decided where and when they would build their new plants.

“Windsor-Tecumseh MP Irek Kusmierczyk said Saturday that he [was] confident construction [would] continue.” xii “Everyone recognizes, all the partners recognize, that this is a generational investment and really, this is the future of the auto sector,” Kusmierczyk said. “It’s the future of Canada and our community and I can tell you that all partners are absolutely committed to this project, both to the battery plant investment and also the investment at Windsor assembly plant.” xiii

Windsor Mayor Drew Dilkens also expressed a similar note. The Windsor plant would create 2,500 jobs and be large enough to fit 114 hockey rinks.xiv The Unifor National President Lana Payne also emphasized the importance of the creation of 2,500 jobs. xv

While negotiations were ongoing, specific terms were being kept private and were not being released to the public and other companies.

Some opponents argued that the Canadian government had already given too much free money to corporations and now had set a precedent for other companies to expect the same. The Canadian Taxpayers Federation (CTF), a non-profit group concerned about government overspending and debt, expressed that the government should reject Stellantis corporate welfare demands.xvi “”If you hand out billions of dollars in taxpayer cash to one auto company, of course the others will follow,” said Jay Goldberg, the federation’s Ontario director. “Taxpayers can’t afford to throw money at every company under the sun and Ottawa needs to say no before it wastes billions more.” xvii

The CTF explained corporate welfare was nothing new. Between 2007 to 2009, federal, provincial and local governments had spent $352.1 billion of taxpayer money on corporations. xviii And in some cases, it was money the government did not have available to spend. According to one Fraser Institute report, Canadian “federal and provincial government debt has nearly doubled (on an inflation-adjusted basis) from $1.1 trillion in 2007/08 to $2.1 trillion in 2022/23.” xix

But can a large capital investment now be good for Canada’s economy in the future? According to some research, “not only is corporate welfare unlikely to help the economy, but it may actually hurt it. Government intervention, including handouts to corporations, interferes with the private decisions of firms, investors and consumers, leading to a misallocation of resources and a less-efficient economy. A less-efficient economy means lower economic growth and less widespread prosperity, despite the benefit to select firms.” xx The result is less taxpayer dollars are available to go towards government services like education, healthcare, affordable housing and other important services individuals need and rely on.

On the other hand, advocates for the poor argued there are many communities that need these high-paying jobs, and Windsor is one of them.xxi In the City of Windsor, poverty has long been higher than provincial and federal averages. In 2023, more than one in five children lived in lowincome households. xxii In addition, “a 2018 food-system assessment conducted by the city’s health unit found that as many as one in 10 households and one in four low-income households [experienced] food insecurity.” xxiii

By 2023, housing costs in Canada had reached an all-time high. The average price of a home in Toronto or Vancouver, for example, was over $1 million, with average home prices elsewhere more than $760,000 forcing many individuals out of the housing market.xxiv

Habitat for Humanity, a charity that had provided no-interest loans to lower-income families to buy a home for nearly four decades, has now seen “its client base shift to a higher income bracket as the typical home price in the country has jumped 40 per cent in five years.”xxv “The charity is increasingly backstopping mortgage loans for higher-income households, including those earning about $100,000 a year, in yet another sign of how unaffordable Canada has become.” xxvi

Although the City of Windsor was a smaller city with a population of approximately 230,000, it had become a focal point for investors and growth opportunities.xxvii The city was a region close to 80 million Americans within a four-hour drive. The Canada-U.S. border bridge [was] the busiest international trade route in the world.” xxviii In addition, several projects were underway. First, a second International Bridge was being built (costing $4.1 billion), a new freeway was built to improve transportation, and a $2 billion mega-hospital was also being constructed. xxix The city was also seeing huge growth in the fields of pharmaceuticals, agriculture, education, and more. xxx

But many economists agreed the cost of living had also increased which made these gains less significant to the average person. In July 2023, the Bank of Canada had raised interest rates by a quarter point, bringing it to the 10th rate hike since 2022 to help control inflation.xxxi In 2023, Canada’s household debt was also at an all-time high, with third-quarters related to home mortgages. According to one global report, Canada had the highest level of household debt in the G7. The G7 included Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. xxxii

While many stakeholders recognized the need to shift to electric vehicles due to climate change, consumers were not always willing to buy them. Why not? The two main reasons were high prices and charging concerns. The average price of a new EV was approximately $US64,000. Hybrid models were a bit cheaper at $US39,000. However, drivers getting stranded on the road when their EV’s run out of power had frustrated many consumers who complained about the lack of charging stations. By July 2023, the supply of unsold EVs increased by 350%, about twice the industry average. Some industry analysts expressed concern that if EV makers cannot reduce prices and increase charging stations, industry consolidation and the slowing of development may occur. xxxiii

By July 2023, Stellantis and the Governments of Canada had announced a new agreement had been reached, and Stellantis decided to continue to build its EV battery plant in the City of Windsor. Meanwhile the Canadian government had not yet solved some of the major hurdles to transition to EVs. Part of the transition involved finding an adequate supply of minerals for batteries and expanding the infrastructure needed for greater electricity generation.xxxiv

Industry analysts had agreed there was still work ahead. Each country, region and community would have different circumstances and needs. In the end, the change may not be a complete shift away from gas vehicles, but a multi-option path to carbon neutrality that included hybrids, hydrogen and gas alternatives, and of course, EVs. xxxv

CASE QUESTIONS

Answer ALL questions below. Keep in mind that in addressing the questions below, you must apply the theories and concepts discussed in class and in the readings to the context of this case. Please make any realistic assumptions that you consider necessary to answer the questions; please state the assumptions clearly. Application of theory with detailed analysis, explanation, and case examples are required.

Questions #1 (10 Marks)

What phase of the industry lifecycle model is the “electric car battery” industry in? Support your answer with characteristics of the industry lifecycle stage and explain with all case examples.

Questions #2 (15 Marks)

Is Stellantis socially responsible? Explain your answer using Carroll’s four (4) levels of corporate social responsibility and include all case examples.

Questions #3 (10 Marks)

Explain how economic factors may be impacting Stellantis. As part of your analysis, include all case examples.

Question #4 (15 marks)

Explain the benefits and risks that Stellantis, a European multinational, brings to Canada (a host country)? Explain with all case examples.

Question #5 (30 marks)

a. Explain arguments for the Canadian government assisting corporations with financial help. Explain with all case examples. (15 marks)

b. Explain arguments against the Canadian government assisting corporations with financial help. Explain with all case examples. (15 marks)

End notes:

i Radwanski, Adam & Stone, Laura. Stellantis halts construction at Windsor EV battery plant over federal funding. The Globe and Mail. May 15, 2023.

ii CTV News Staff. Construction stops at Windsor EV battery plant site, Stellantis says fed have not delivered. CTV News. May 15, 2023.

iii CTV News Staff. Construction stops at Windsor EV battery plant site, Stellantis says fed have not delivered. CTV News. May 15, 2023.

iv Friedman, Gabriel. What Stellantis halting the Windsor battery plant means for Canada’s EV supply chain. The Financial Post. May 15, 2023.

v Friedman, Gabriel. What Stellantis halting the Windsor battery plant means for Canada’s EV supply chain. The Financial Post. May 15, 2023.

vi CBC News. Stellantis stops construction on portion of Windsor, Ont., EV battery plant amid Ottawa dispute. CBC News. May 15, 2023. https://www.cbc.ca/news/canada/windsor/stellantis-battery-plant-construction-stops-1.6843669#:~:text=Windsor%C2%B7Updated- ,Stellantis%20stops%20construction%20on%20portion%20of%20Windsor%2C%20Ont.%2C%20EV,delivered%20on%20what%20was%20promised.

vii Radwanski, Adam & Stone, Laura. Stellantis halts construction at Windsor EV battery plant over federal funding. The Globe and Mail. May 15, 2023.

viii The Canadian Press. Stellantis has what it needs to make decision on Windsor battery plant: Champagne. City TV News. June 6, 2023.

ix The Canadian Press. Federal government close to deal to get Stellantis battery plant back on track. Canadian Manufacuring. June 1, 2023.

x The Canadian Press. Federal government close to deal to get Stellantis battery plant back on track. Canadian Manufacuring. June 1, 2023.

xi Ontario Construction News. Stellantis halts construction on Windsor EV battery pant amid federal funding dispute. May 16, 2023.

xii CTV News Staff. Construction stops at Windsor EV battery plant site, Stellantis says fed have not delivered. CTV News. May 15, 2023.

xiii CTV News Staff. Construction stops at Windsor EV battery plant site, Stellantis says fed have not delivered. CTV News. May 15, 2023.

xiv Friedman, Gabriel. What Stellantis halting the Windsor battery plant means for Canada’s EV supply chain. The Financial Post. May 15, 2023.

xv CBC News. Stellantis stops construction on portion of Windsor, Ont., EV battery plant amid Ottawa dispute. CBC News. May 15, 2023. https://www.cbc.ca/news/canada/windsor/stellantis-battery-plant-construction-stops-1.6843669#:~:text=Windsor%C2%B7Updated- ,Stellantis%20stops%20construction%20on%20portion%20of%20Windsor%2C%20Ont.%2C%20EV,delivered%20on%20what%20was%20promised.

xvi CBC News. Stellantis stops construction on portion of Windsor, Ont. EV battery plant amid Ottawa dispute. CBC News. May 15, 2023.

xvii CBC News. Stellantis stops construction on portion of Windsor, Ont. EV battery plant amid Ottawa dispute. CBC News. May 15, 2023.

xviii Hill, Tegan. Sadly, Stellantis and Volkswagen’s corporate welfare is nothing new. The Globe and Mail. July 5, 2023.

xix Fuss, Jake. Canadians bear weight of growing government debt burden. The Ottawa Sun. February 22, 2023. The Fraser Institute. .

xx Hill, Tegan. Sadly, Stellantis and Volkswagen’s corporate welfare is nothing new. The Globe and Mail. July 5, 2023.

xxi Eschner, Kat. Recession Road: Windsor has a hunger problem and it’s getting worse. TVO. December 14, 2022.

xxii Eschner, Kat. Recession Road: Windsor has a hunger problem and it’s getting worse. TVO. December 14, 2022.

xxiii Eschner, Kat. Recession Road: Windsor has a hunger problem and it’s getting worse. TVO. December 14, 2022.

xxiv Younglai, Rachelle. As home prices soar, Habitat for Humanity helps higher-income Canadians buy properties. The Globe and Mail. July 23, 2023.

xxv Younglai, Rachelle. As home prices soar, Habitat for Humanity helps higher-income Canadians buy properties. The Globe and Mail. July 23, 2023.

xxvi Younglai, Rachelle. As home prices soar, Habitat for Humanity helps higher-income Canadians buy properties. The Globe and Mail. July 23, 2023.

xxvii Grant, Corben. Why Windsor’s economy is making it a hot pick for investors. Canadian Real Estate Magazine. September 14, 2022.

xxviii Grant, Corben. Why Windsor’s economy is making it a hot pick for investors. Canadian Real Estate Magazine. September 14, 2022.

xxix Grant, Corben. Why Windsor’s economy is making it a hot pick for investors. Canadian Real Estate Magazine. September 14, 2022.

xxx Grant, Corben. Why Windsor’s economy is making it a hot pick for investors. Canadian Real Estate Magazine. September 14, 2022.

xxxi Ovid, Noella. Posthaste: Latest Bank of Canada rate hike to take toll on many people’s finances. Financial Post. July 21, 2023.

xxxii The Canadian Press. Canada has highest household debt level in G7: CMHC deputy chief economist. The Globe and Mail. May 23, 2023.

xxxiii Carlson, Gus. Unsold electric vehicles are piling up – people like the idea but are not buying them. The Globe and Mail. July 22, 2023.

xxxiv Hill, Tegan. Sadly, Stellantis and Volkswagen’s corporate welfare is nothing new. The Globe and Mail. July 5, 2023.

xxxv Carlson, Gus. Unsold electric vehicles are piling up – people like the idea but are not buying them. The Globe and Mail. July 22, 2023.

Collepals.com Plagiarism Free Papers

Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.

Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS

Why Hire Collepals.com writers to do your paper?

Quality- We are experienced and have access to ample research materials.

We write plagiarism Free Content

Confidential- We never share or sell your personal information to third parties.

Support-Chat with us today! We are always waiting to answer all your questions.