New prototype designs unveiled for Project Arrow — the first all-Canadian electric vehicle

“We’re not just showing a theoretical vehicle, we’re building a car that can go into serious production,” Volpe said, who shared renderings of the Arrow’s silver exterior and sleek design exclusively with the Star.

The prototype has reached the building phase — engineering and assembly of the showcase vehicle is underway. It will be unveiled to potential investors, starting in 2023, at auto shows around the world for two years. The production cost, if it were to be mass produced, would be between $40,000 and $60,000 per vehicle.

It could be a tough sell.

The electric vehicle space is already crowded with established models from Tesla, Ford, and General Motors. And Canadian auto parts manufacturer Magna recently partnered with an Israeli startup to create its own electric vehicle.

But Volpe is undeterred. Project Arrow brings something new to the table: every part will be made and designed in Canada.

The project has secured some serious financial backing. In addition to $20 million coming from the APMA and suppliers, the federal government chipped in $5 million, the Ontario government gave $1.78 million and Quebec earmarked $1.4 million to Quebec-based parts suppliers.

When Volpe met with Ontario Premier Doug Ford in 2020 to discuss the project, he quickly found their visions aligned.

“When Flavio told me, he wanted to design it, I said don’t just design it, built it here,” the premier said. “We’re going to be one of the leaders in North America.”

Project Arrow is being designed to be scaled up and mass produced in Canada. The goal is to build 50,000 to 60,000 vehicles a year.

While Volpe acknowledged Canada can’t compete pricewise with the other major players — GM’s electric vehicle is priced at over $30,000 and Mazda’s sells for around $40,000 — it can provide better quality, he said.

“We can show the world that we built a quality product from start to finish,” Volpe said.

APMA had to be “aggressive” from the beginning to prove Canadian capabilities in the market, said Marcello Grassi, Project Arrow’s chief adviser who has been responsible for turning the demonstration model into a functioning car.

More than 300 companies expressed interest in participating in the project’s design, showing there is a hunger for this work in Canada, Grassi said.

“The old establishment of the car supply chain is being challenged globally and we see this as an opportunity to participate,” he said.

But there are many barriers.

It’s difficult for new players to enter the market, said Joe McCabe, president and CEO of AutoForecast Solutions, a provider of global automotive forecasting databases. The key for Canadian companies is to prove that the Canadian market and manufacturing capabilities are robust.

Over the last decade, major investment has gone to facilities in the United States that have bigger manufacturers and more companies, making it difficult to compete, said McCabe.

On the flip side, Canada doesn’t need enormous volumes of production to be successful due to the higher cost of electric vehicles, McCabe said. Building 50,000 vehicles a year, with the possibility of expanding, is a reasonable model for a country like Canada, as manufacturers and workers can complete a smaller volume size.

Olivier Trescases, a professor of electrical and computer engineering and director of the Electric Vehicle Research Centre at the University of Toronto, said Ontario has the capabilities to produce electric vehicles but it will be an uphill battle as manufacturers have to completely retool to create electric vehicle parts, which is extremely costly.

The battery is the most expensive part of the car, and there are still questions around battery longevity in Canada’s cold climate.

Another obstacle is the Canadian market. It is too small for Project Arrow to scale up successfully. The suppliers that make the battery, charger, or motor need international connections, Trescases said.

“They must have sales outside of Canada and sales volume larger than the Canadian market to bring costs down,” he said.

But the province does have a strong supply network with GM, Ford, Stellantis and Magna all capable of manufacturing vehicle parts, Trescases said. Advanced software and AI is also integral to electric vehicles, and there is a sturdy labour force of IT workers and companies in Toronto and Waterloo able to contribute.

Battery manufacturing for electric vehicles is getting substantial investment from the government Canada, as the country has the natural resources such as lithium to make this component at mass scale. It may be a more realistic way to enter the electric vehicle market for Canada, Trescases said.

Volpe hopes Project Arrow shows key market players — the United States, China, Germany, Japan, and Mexico — that Canada has every element necessary to make electric vehicles.

“We have mobility software, AI, machine learning, all the lithium to turn into batteries … I hope this inspires a startup culture. No one else is doing this.”