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Are Chinese-made EVs a national security threat? · Kvetch & Release

• 0:01
  Speaker 1: Hey, we are back on a hundred CKLW. While the
• 0:07
  Speaker 1: Beatles might have said that you can drive their car,
• 0:10
  Speaker 1: you might want to be thinking twice about jumping into
• 0:14
  Speaker 1: a Chinese made electric vehicle. Why well, there are concerns
• 0:19
  Speaker 1: that they could be spying machines that pose an invisible
• 0:24
  Speaker 1: threat to the country experts or raising alarms. We know
• 0:27
  Speaker 1: that conversations are being had at the highest level of
• 0:30
  Speaker 1: our government. Deputy Prime Minister Christia Freeland confirmed last month
• 0:34
  Speaker 1: that the government is studying the national security aspects of
• 0:38
  Speaker 1: Chinese made evs. This is just a wild story. Joining
• 0:42
  Speaker 1: us to discuss is someone who can help break down
• 0:46
  Speaker 1: what the issues are as he sees them. The president
• 0:49
  Speaker 1: of the Automotive Arts Manufacturers Association, and my friend Flavio
• 0:52
  Speaker 1: Volpe joins me right now, how you doing.
• 0:55
  Speaker 2: Hey, John love wild stories.
• 0:57
  Speaker 1: Wild stories are good ones. They keep you riveted and
• 1:00
  Speaker 1: on the edge of your seat. And this is one
• 1:02
  Speaker 1: that you know. I had thought about the national security
• 1:06
  Speaker 1: issues when it came to Chinese eds, just in terms
• 1:09
  Speaker 1: of the trade component and undering our domestic producers and
• 1:14
  Speaker 1: assemblers because they have been state subsidizing. I didn't really
• 1:18
  Speaker 1: think about the national security aspect of just the fact
• 1:22
  Speaker 1: that these are computers on wheels.
• 1:25
  Speaker 2: Yeah. Look, you know where there was a great story
• 1:28
  Speaker 2: in the Star today, but there's been stories across major
• 1:32
  Speaker 2: media platforms in Canada and outside of Canada saying let's
• 1:36
  Speaker 2: put aside for the moment what the economic risk of
• 1:39
  Speaker 2: cheap subsidized Chinese cars are to the auto sector. Electric
• 1:44
  Speaker 2: vehicles are four hundred volt eight hundred vold platforms instead
• 1:47
  Speaker 2: of the forty eight volte platform in your internal combustion
• 1:50
  Speaker 2: engine vehicle. That means a lot of exciting things that
• 1:53
  Speaker 2: they can do, you know, auto drive, connected, autonomous, and
• 1:56
  Speaker 2: all kinds of different applications in it that you know,
• 2:00
  Speaker 2: just make for you know, a better customer experience and
• 2:05
  Speaker 2: some societal good. And when we all play by the
• 2:08
  Speaker 2: rules here, we say, oh, this is all good, especially
• 2:11
  Speaker 2: because the law protexas from you know, privacy incursions, et cetera. Well,
• 2:17
  Speaker 2: Jennies don't have the same laws and they don't have
• 2:19
  Speaker 2: the same orientation to IP tracking of citizens that you know,
• 2:26
  Speaker 2: any of your listeners that would have visited China know
• 2:29
  Speaker 2: that this is a society that is dominated by tracking
• 2:35
  Speaker 2: through cameras and censors. The entire society and and what
• 2:40
  Speaker 2: we're seeing in some of these pieces is global experts
• 2:43
  Speaker 2: wing in and saying, hey, listen, do you know that
• 2:46
  Speaker 2: even in China, Tesla's American made Teslas are banned from
• 2:51
  Speaker 2: going into your government buildings because they're aware of the
• 2:54
  Speaker 2: surveillance capability of a Tesla and that they've the deal
• 2:58
  Speaker 2: with Tesla is you could cars here, but your data
• 3:01
  Speaker 2: center for your vehicles they'll drive your vehicles has to
• 3:04
  Speaker 2: be in China and the technologists to stay here. And
• 3:07
  Speaker 2: yet we're not talking about that here, well not even
• 3:10
  Speaker 2: awake to it here.
• 3:11
  Speaker 1: No, And it seems like something that we should definitely
• 3:13
  Speaker 1: be having this conversation about. Experts again in this piece
• 3:15
  Speaker 1: are saying these you know, evs have cameras that are
• 3:19
  Speaker 1: all over them for their sensors, and that that data
• 3:22
  Speaker 1: can be used to turn these into mobile spy machines.
• 3:25
  Speaker 1: They could even be used to disrupt five G cell
• 3:28
  Speaker 1: service or Wi Fi networks. And then the really interesting
• 3:31
  Speaker 1: one that I saw here that someone was saying is
• 3:33
  Speaker 1: because of the full self driving components, what happens if someone,
• 3:38
  Speaker 1: if a you know, state actor or a non state actor,
• 3:41
  Speaker 1: decides to have a bunch of Tesla's all drive right
• 3:44
  Speaker 1: to the largest intersection in the city, and you know,
• 3:47
  Speaker 1: cause mass gridlock, you could really cause some serious disruption.
• 3:51
  Speaker 1: And again, as you said, it's all well and good
• 3:53
  Speaker 1: that we play by the rules here, but these things
• 3:56
  Speaker 1: aren't made here, and I don't know how you would
• 3:59
  Speaker 1: deal with it other than, you know, forcing them to
• 4:02
  Speaker 1: manufacture things here or have full access to the data
• 4:06
  Speaker 1: like they're demanding in China.
• 4:09
  Speaker 2: You know, my comment in that piece was, you know,
• 4:11
  Speaker 2: we're so naive. We expect China played by the rules.
• 4:14
  Speaker 2: Yet we also acknowledge that China is the country that
• 4:19
  Speaker 2: arrested arbitrarily the two Michaels because they were upset by
• 4:23
  Speaker 2: what we did. There's a Bloomberg report last week that
• 4:27
  Speaker 2: says Canadian intelligence briefing that they're seventeen up to seventeen sorry,
• 4:32
  Speaker 2: at least seventeen secret Chinese police office offices in Canada.
• 4:39
  Speaker 2: That you know, we're all seized in Autawa with the
• 4:43
  Speaker 2: fact that the Chinese are interfering in our elections. But
• 4:45
  Speaker 2: sure they're going to play by the rules when it
• 4:47
  Speaker 2: comes to where is John Litke and his BYD and
• 4:53
  Speaker 2: what are his what are his driving behaviors. What did
• 4:58
  Speaker 2: the cameras and sensors pick up on his drive times
• 5:02
  Speaker 2: a million? You know, just sure there's no strategic advantage
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  Speaker 2: to that. We should just ignore that and and talk
• 5:09
  Speaker 2: about free market and how important it is that we
• 5:12
  Speaker 2: should all be driving uh clean Chinese cars that we know,
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  Speaker 2: none of the processes or their value systems are are
• 5:21
  Speaker 2: cleaner or or similar ours in that. You know, when
• 5:26
  Speaker 2: we when we talk about experts, you know, the one
• 5:30
  Speaker 2: of the best experts in automotive cybersecurity, two of them
• 5:33
  Speaker 2: actually are at the University of Windsors Shield Cybersecurity Center.
• 5:38
  Speaker 2: Doctor Mitro Mahasani said, Hey, listen, yes, we do have
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  Speaker 2: Chinese electronics in you know, in a lot of aspects
• 5:46
  Speaker 2: in our lives, including our phones. But you know we
• 5:49
  Speaker 2: there are firewalls when it comes to your phones, the
• 5:51
  Speaker 2: networks are are you know, you design around it. But
• 5:55
  Speaker 2: you know you have these vehicles plugging into public grids,
• 5:59
  Speaker 2: and have we studied the potential vulnerabilities before we open
• 6:06
  Speaker 2: the market to them. You know, it's it's these are
• 6:10
  Speaker 2: important questions that need to be asked, and I think
• 6:12
  Speaker 2: the federal government and its consultation process asked in one
• 6:17
  Speaker 2: of its four pillars for experts in Canada to weigh
• 6:21
  Speaker 2: in on what some of the security risks and cybersecurity
• 6:24
  Speaker 2: risks are. And they're doing that now, and I'm glad
• 6:26
  Speaker 2: they're doing that because I you know, my inbox has
• 6:30
  Speaker 2: filled with lots of people saying, well, you know, the
• 6:34
  Speaker 2: uncompetitive Canadian automotive sector is just trying to protect its interests,
• 6:37
  Speaker 2: like actually, the Chinese don't trust Tesla in China, and
• 6:43
  Speaker 2: you're just being naive. Never mind that they can subsidize
• 6:48
  Speaker 2: every part of their supply chain, but they refuse to
• 6:50
  Speaker 2: subsidize labor. So here we're fifty dollars all in cost.
• 6:53
  Speaker 2: Over there, people are making two dollars an hour on
• 6:56
  Speaker 2: six day work weeks of twelve hour workdays. But sure,
• 6:59
  Speaker 2: sure let's get let's get access to cheap cars because
• 7:03
  Speaker 2: we have a right to.
• 7:05
  Speaker 1: You know, I we see a lot of people on
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  Speaker 1: social media these days and writing opinion pieces and columns
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  Speaker 1: that would go and you know, say what you just
• 7:14
  Speaker 1: said that about you, that you're just trying to protect
• 7:17
  Speaker 1: your industry, your your companies that are part of your association,
• 7:21
  Speaker 1: and that this is all very good for our society
• 7:23
  Speaker 1: because cheaper cars means cheaper access. It must get frustrating
• 7:28
  Speaker 1: for you that to you know, sort of be type
• 7:30
  Speaker 1: cast in that way, but also to be knowledgeable, and
• 7:33
  Speaker 1: I'm sure want to respond and go, what the heck
• 7:35
  Speaker 1: are you guys going on about? Why are you defending
• 7:38
  Speaker 1: a communist country that is being hostile towards us?
• 7:41
  Speaker 2: John. When I was a younger man, I used to box.
• 7:45
  Speaker 2: Sometimes you get punch in the face, but if you're
• 7:48
  Speaker 2: a boxer, you adjust. I love the fight and call
• 7:53
  Speaker 2: me in and name you want. But everybody who's listened
• 7:56
  Speaker 2: to you knows that when it comes to the auto
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  Speaker 2: sector that people who are in it, the companies that
• 8:01
  Speaker 2: are in it, the innovation that we're developing in Canada
• 8:05
  Speaker 2: are capabilities. I'll lead with my chin, happy to do it.
• 8:09
  Speaker 2: And I think if I never thought that we would
• 8:14
  Speaker 2: have China apologists in this country. But you know, for
• 8:18
  Speaker 2: the most part, they do it publicly and on the records,
• 8:22
  Speaker 2: so we get to size them up and understand who
• 8:28
  Speaker 2: we're fighting and where their conflicts are. Usually they just
• 8:31
  Speaker 2: call me an apologist when they lose the argument. I
• 8:34
  Speaker 2: do this every day, and I'll do it many times
• 8:37
  Speaker 2: a day, happy to do it. I know that in
• 8:39
  Speaker 2: the end, whatever I'm apologizing for is Canadian. At least
• 8:42
  Speaker 2: I'm apologizing for us. But as you know, I don't apologize.
• 8:47
  Speaker 1: Well, you're fighting for your members, but you're fighting for
• 8:50
  Speaker 1: their employees, for the industry as a whole, and that
• 8:53
  Speaker 1: of course relates to our national economy. So I think
• 8:56
  Speaker 1: it's a good fight. You know, it does seem though.
• 8:58
  Speaker 1: It's good that the FEDS are taught talking about this
• 9:00
  Speaker 1: very real issue to our national security now, but it
• 9:03
  Speaker 1: does seem a little bit late to the game. We're
• 9:06
  Speaker 1: talking about, you know, slapping one hundred percent tariff on it,
• 9:09
  Speaker 1: but they're still going to be coming in to the
• 9:11
  Speaker 1: country at least as of right now, and they're still
• 9:13
  Speaker 1: going to be coming in relatively cheap even with that
• 9:16
  Speaker 1: hundred percent tariff. I wonder if we're moving too slow,
• 9:20
  Speaker 1: if this needs to have more of an immediate reaction,
• 9:23
  Speaker 1: like maybe say, you know what, no, we're not going
• 9:25
  Speaker 1: to allow them to be imported until we can, you know,
• 9:27
  Speaker 1: actually figure out what's going on here. Is there a
• 9:30
  Speaker 1: risk that if these things hit the road, Flavio and
• 9:33
  Speaker 1: people start buying them, that it'll be more difficult for
• 9:36
  Speaker 1: the government to do anything about it, because you're gonna
• 9:38
  Speaker 1: have a lot of angry voters going, I spent twenty
• 9:40
  Speaker 1: one thousand dollars on this, then you're not taking it
• 9:43
  Speaker 1: away from me. You can't tell me I can't use it. It
• 9:46
  Speaker 1: seems like the risk is very real.
• 9:48
  Speaker 2: Well, luckily they're not here yet. And one of the
• 9:50
  Speaker 2: first steps that must be taken if you want to
• 9:53
  Speaker 2: sell a car to Canadian consumers, and trust me, I
• 9:55
  Speaker 2: know this because we've built project there and everybody keeps
• 9:57
  Speaker 2: asking me when they could buy one, you got to
• 10:00
  Speaker 2: get it federally certified, crash tested. You've got to get
• 10:06
  Speaker 2: that in the in the US and in Canada, and
• 10:09
  Speaker 2: these companies haven't done it yet. So there is time.
• 10:13
  Speaker 2: In that interim time, the Americans are talking about something
• 10:17
  Speaker 2: completely past what we're talking about. They're saying so that
• 10:21
  Speaker 2: the Biden administration put out a federal put out an
• 10:26
  Speaker 2: executive order that's that by twenty twenty six, if your
• 10:29
  Speaker 2: car is going to connect to federal infrastructure, you know,
• 10:32
  Speaker 2: five G towers connected highways and have to have complete
• 10:38
  Speaker 2: software transparency or it won't connect. They are moving now
• 10:43
  Speaker 2: to real discussions on should we be doing what China
• 10:48
  Speaker 2: did to Teslas. And if that's the case, and there's
• 10:53
  Speaker 2: momentum in the US to ban vehicles that don't have
• 10:56
  Speaker 2: software transparency that you know, they like to use this
• 11:01
  Speaker 2: Foreign Entities of Concern classification for China. If they ban
• 11:05
  Speaker 2: Chinese cars, then just like everything that we've done together
• 11:11
  Speaker 2: to build a common market, that's going to be the
• 11:14
  Speaker 2: conversation here too. And for everybody who says, oh, that
• 11:17
  Speaker 2: makes my car costs more, actually doesn't because you can't
• 11:19
  Speaker 2: buy one now. The only Chinese car you can buy
• 11:21
  Speaker 2: one now is now here is a buickan Vision, or
• 11:25
  Speaker 2: a Tesla Model three or a Tesla Model why or
• 11:29
  Speaker 2: various Volvo products that you can get another you can
• 11:32
  Speaker 2: get sourced from other countries.
• 11:35
  Speaker 1: Okay, well you know last question I have for you
• 11:38
  Speaker 1: shifting gears, but keeping it in the conversation about EV's
• 11:40
  Speaker 1: and I would love for you to correct me if
• 11:42
  Speaker 1: I'm wrong. But the EV subsidies that we have here,
• 11:46
  Speaker 1: is it legislatively tied directly to the US EV subsidies
• 11:50
  Speaker 1: I know that we talked about if they end theirs,
• 11:52
  Speaker 1: we end ours? Is it an automatic thing?
• 11:55
  Speaker 2: The battery production deals that we did with next star LG.
• 12:00
  Speaker 2: Stalantis there and the Windsor ended up in in Montreal
• 12:04
  Speaker 2: with Northfolk and in Saint Thomas with VW are deals
• 12:09
  Speaker 2: that match the US subsidy. And there's a cause in
• 12:12
  Speaker 2: all of them that says, if the US stops providing
• 12:18
  Speaker 2: the production subsidy, then Canada is no longer obligated to
• 12:22
  Speaker 2: those three deals. As you know I've defended many times
• 12:26
  Speaker 2: needed to match the US subsidy, but also Canada we
• 12:30
  Speaker 2: were you know, the federal government and provincial government were
• 12:33
  Speaker 2: smart enough to say, hey, if the thing that we
• 12:35
  Speaker 2: matched disappears, then it disappears for us too.
• 12:42
  Speaker 1: So my question then would be, is there any concern
• 12:46
  Speaker 1: having done all of this getting these ramped up? We
• 12:48
  Speaker 1: know the infrastructure cost has been immense, and they're all
• 12:51
  Speaker 1: moving towards getting to the point of being able to
• 12:53
  Speaker 1: produce the batteries. If a Donald Trump presidency occurs again
• 12:58
  Speaker 1: and he's re elected, he says on day one he's
• 13:00
  Speaker 1: ripping up those subsidies. So on January twenty first of
• 13:04
  Speaker 1: next year, I wonder if there is a risk that
• 13:06
  Speaker 1: we don't still have ours, and if that's the case,
• 13:09
  Speaker 1: if there would be advocacy from people like yourself to
• 13:12
  Speaker 1: go to our government and say we still need these things.
• 13:17
  Speaker 2: Well from so who you put a lot of whats there?
• 13:19
  Speaker 2: Sorry ye one A yeah, he might win. He did
• 13:23
  Speaker 2: say he's going to get rid of the EV mandates,
• 13:26
  Speaker 2: which is requiring companies to sell EV. I think we're
• 13:29
  Speaker 2: past the tipping point. I think we are going there,
• 13:32
  Speaker 2: and it's a choppy transition. He did say we're going
• 13:36
  Speaker 2: to chop up EV subsidies. But knowing him, I remember
• 13:39
  Speaker 2: when somebody had to tell him in the first term
• 13:41
  Speaker 2: that when he said he was going to rip up
• 13:43
  Speaker 2: mats that he didn't know Canada was part of it.
• 13:46
  Speaker 2: So I'm not sure he knows he's being rhetorical. But
• 13:50
  Speaker 2: I think we did ours to match the plainshield. Otherwise
• 13:53
  Speaker 2: those investments have gune to the US. If the US
• 13:58
  Speaker 2: pulls it, then we pull it. We're so far down
• 14:00
  Speaker 2: the path of manufacturing here the playing field can be
• 14:04
  Speaker 2: re evened. You won't hear me fighting for it. You're
• 14:08
  Speaker 2: going to hear me saying let's have a thoughtful climb
• 14:11
  Speaker 2: down from those and make sure that all those jobs
• 14:13
  Speaker 2: that are dependent on it, those contracts dependent on it,
• 14:16
  Speaker 2: have reached them maturity and a hipping point. I think
• 14:18
  Speaker 2: they would be anyway, but I do know if we
• 14:20
  Speaker 2: did it match them, we would never have landed those plants.
• 14:24
  Speaker 2: Like the next starm one that's just about ready down there.
• 14:29
  Speaker 1: It is a big, big facility. Just drove by it
• 14:32
  Speaker 1: yesterday myself. It's huge. Well, Flavia, really appreciate your time
• 14:36
  Speaker 1: breaking it all down for us. It's such a fascinating
• 14:39
  Speaker 1: topic and it's great to have an expert like you
• 14:41
  Speaker 1: be able to explain it. So again, thank you and
• 14:43
  Speaker 1: have yourself a great weekend.
• 14:45
  Speaker 2: Anytime you two. John looking forward to the next time.
• 14:48
  Speaker 1: Thank you so much. Flavio Volpe is the president of
• 14:51
  Speaker 1: the Automotive Hearts Manufacturers Association of Canada.