A powertrain is everything that makes the car move—like the engine or electric motor and the parts that connect them to the wheels. The discussion is about how changing to electric power affects car companies’ business plans.
Battery life is how long the EV battery stays healthy enough to provide good driving range. If people worry the battery won’t last, they’re less willing to pay high prices for used EVs.
Resale value gap just means how much more (or less) one type of car is worth after you’ve owned it for a few years. Here, it’s about EVs losing value faster than gas and hybrids.
Car
V8 engines
A V8 is a type of gas engine with eight cylinders. This story says General Motors is spending money to build new V8 engines for big trucks and SUVs.
Tariff uncertainty refers to uncertainty about import/export taxes that can change the cost of moving parts and vehicles across borders. The segment ties this uncertainty to GM’s investment decision while still emphasizing long-term production plans.
Stellantis is a car company. Here, they’re mentioned as supporting or pushing alignment with European vehicle rules, which connects to Canada’s safety standards.
Transport Canada is the Canadian government agency that sets transportation rules and policies. In this discussion, it’s mentioned because it may influence whether importing vehicles becomes easier or harder.
Boston Consulting Group is a consulting company that helps businesses with strategy—like how to plan and make decisions. Here, one of their leaders talks about a report on how car companies can grow and profit as cars become more electric.
This is the auto industry moving away from gas engines and toward electric drivetrains. Companies have to change what they build and how they make money while they invest in new electric technology.
OEM means the company that makes the cars in the first place. The episode also talks about suppliers—companies that provide parts—because both groups are trying to figure out how to make money during the shift to electric vehicles.
ICE is the usual gas or diesel engine in most cars today. The discussion is about what happens when companies move away from that toward electric cars.
Profit pools are the areas of the business where companies make the most money. The idea here is that when cars go electric, the money-making areas can change too.
They’re saying that building the technology for a car’s power system can cost a huge amount of money. The point is that these decisions are very expensive and high-stakes.
White space opportunities are market niches with less competition where a company can grow or earn better margins. The speaker frames this as a strategy for profitability rather than simply chasing the biggest or fastest-growing segments.
A pure EV startup is a company that bets everything on making electric cars. If that plan fails, there may be no backup business to keep it afloat.
Concept
IP
IP is a company’s protected know-how—like patents or technology it can legally use or license. The point here is that some startups don’t have that kind of backup revenue.
An EV is a car that runs mainly on electricity from a battery, not a gas engine. The point here is that building an EV business from scratch can be expensive.
A platform is the underlying “base” of a car that multiple models can share. If you reuse it, you don’t have to redesign everything from scratch, which saves money.
A refresher is when an automaker updates an existing car partway through its life—like a face-lift plus new features. It can change how quickly they invest in new technology.
Upfront capital investment refers to the large amount of money companies must spend early—before products generate revenue. The transcript links higher upfront costs (and potentially more incentives) to faster-growing segments and more competition, especially around EVs.
Incentives are deals that make a car cheaper to buy, like rebates or special financing. The idea is that more competition can lead to more of these offers.
“Break even” means you sell enough to cover all your costs, so you’re not losing money anymore. After you pass that point, each additional sale can start adding profit.
Market share is how much of the market a brand sells compared to everyone else. If you gain even a little share, you might sell enough cars to make money.
A midsize SUV is a family-sized SUV that’s bigger than a compact but not as large as a full-size. The point here is that many brands compete in that size category.
Scenario planning means thinking through different “what if” futures and planning for each. The goal is to choose a strategy that still works even if the market turns out differently.
Midsize pickups are trucks that are smaller than the biggest full-size trucks. The discussion is about how this truck category has fewer players and is harder for new entrants to break into.
“Full battery electrics” means vehicles powered only by electricity stored in a battery, with no gasoline engine. The transcript contrasts this with hybrids, implying different adoption timelines and business impacts for automakers.
TCO (total cost of ownership) is the overall cost to run a vehicle over time, including purchase price, fuel/energy, maintenance, and sometimes financing costs. In EV adoption debates, lower TCO is often cited as a reason EVs can win faster.
Consumer adoption is how quickly people start buying and using a new kind of car. If it’s slow, it usually means people aren’t convinced yet or the supporting stuff isn’t ready.
Infrastructure investments are spending to build or expand the systems needed for a technology to work at scale—here, things like charging networks and related grid upgrades. The transcript argues that without these, EV adoption can’t accelerate as quickly.
Concept
credits have gone off
This is talking about government incentives that can make EVs cheaper or more attractive. If those incentives change, automakers may slow down or shift strategy.
“Fuel sensitive” describes consumers whose buying decisions respond strongly to fuel costs—meaning they pay close attention to how expensive it is to drive. In the scenario, that sensitivity supports hybrids/EVs when fuel prices change.
LIVE
At TD Auto Finance, we're reimagining the vehicle shopping and buying experience.
Contact our dedicated support teams today at 1-855-TD-Auto-1 to find out more about our
flexible financing options that will help you meet your customer's auto financing needs.
Hi everyone and welcome to the May 1st,
2026 episode of the Automotive News Canada podcast. I'm your host, Greg Lason, the digital and
mobile editor at Automotive News Canada, coming to you from just outside Windsor,
Ontario, the automotive capital of Canada. Today on the show, we hear from Boston Consulting
Group managing director Eric Jesse. He recently spoke with Automotive News deputy editor and
electric vehicle reporter Lindsey Van Hully. The two discussed how automakers can find white
space to win in different powertrain segments. Eric talks about how automakers can find gaps
in the marketplace where they can be first and face fewer rivals. But first, a look at some of
the top Canadian automotive stories of the week. Used electric vehicles in Canada lose value
faster than gas and hybrid models. Data from Canadian Blackbook shows four-year-old EVs retain
about 41% of their value, well below comparable vehicles. Ice vehicles retained about 56% of
value, while hybrids held on to about 65%. Poor marketing, along with consumer concerns about
battery life and weak demand overall, hurt the value of used EVs. But momentum is shifting,
rising gas prices, new incentives and growing consumer familiarity are boosting demand.
Analysts expect the resale value gap to shrink to less than 5% by 2030.
On the manufacturing front, General Motors is doubling down on V8 power in Canada.
The automaker will invest $691 million in its St. Catherine's Ontario propulsion plant
to build the next-generation V8 engines for full-size pickups and SUVs. The move comes amid
tariff uncertainty but reinforces the plant's long-term role, with new equipment already arriving.
St. Catherine's will be one of three sites producing the engines, alongside U.S. plants in
Flint, Michigan and Tanawanda, New York. Finally, in retail news, pressure is mounting on Ottawa to
broaden Canada's vehicle safety standards. Stellantis says aligning with European rules
could open the door to importing more overseas models, including affordable and electrified
options. Right now, strict alignment with the U.S. standards makes it costly to bring in vehicles
not sold south of the border. But industry groups say momentum is building. Transport Canada has
made no commitments and any change would likely require new legislation. That's a look at some
of the top Canadian automotive stories of the week. You can find more on those and other stories at
our website, AutomotiveNews.ca. Coming up, we hear from Boston Consulting Group Managing Director,
Eric Jesse. At TD Auto Finance, we pride ourselves on being remarkably human and
refreshingly simple, with relationships at the heart of everything we do and over 30 years in
the industry. We're proud to provide reliable, award-winning service in the communities you
live and work in. Our specialized sales, credit, and funding teams are committed to cultivating
personal connections and building deeper, long-term relationships with you anytime, anywhere. As a
true full-spectrum lender, we're always seeking new ways to enhance and simplify the vehicle-buying
process for you and your customers. Our flexible financing solutions and digital service options
are designed to help customers get into their vehicle of choice faster. Contact us today at
1-855-TEDOTO1 to find out more about our innovative products and programs. We also offer a full suite
of commercial floor plan financing options that can help you grow your business.
Welcome back to the Automotive News Canada podcast. I'm your host, Greg Lason. We will now hear a
conversation between Automotive News Deputy Editor and Electric Vehicle Reporter Lindsey Van
Hully and Boston Consulting Group Managing Director Eric Jesse. Eric Jesse, thanks for
joining us today. Thanks, Lindsey. Pleasure to be here. So you're a co-author on a new report
that looks at growth and profitability opportunities for automakers as the industry's
electrification transition continues to unfold. What prompted you and your colleagues to write
the report and what questions were you interested in exploring? Yeah, so a lot of our clients have
been struggling to figure out how to position their portfolios to make money. And this is both the OEM
site but also the suppliers that work with them. And so there's just a need to figure out what the
right clays are against kind of a multitude of outcomes that leave them profitable. Where if
they overinvest in one place, it can go really far south really quickly. But if they underinvest,
they're going to miss the opportunity to participate meaningfully in the future.
What's been kind of leading into that struggle to kind of figure out where to invest? I wonder
how important this type of product planning becomes when you have so many different changes we've
seen in the market from EV regulations to tariffs. We know costs are going up and profits are being
squeezed. And I wonder how much of the kind of big macro factors are part of this discussion.
I mean, I think they're core to it. I would say the biggest piece for most of them is really
how fast does electrification happen? And so like there's really big and meaningful investments that
go with that. As you leave and transition from ICE, the portfolio where they're really well rooted,
they're way down the learning curve, the whole kind of machine is built around that, to a new world
that is very much going to be electric vehicles at some point. And that requires a whole new
powertrain, a different form of factory to set up those batteries, and how they move in that
direction. And so you're actually transitioning profit pools. And so how you set up against those
are really important if you think about the fact that a powertrain is easily a billion dollar
investment if you think of the whole platform through in the case of an ED.
You know, and I think that's an interesting point because you and your team argue that the best
profitability opportunities and growth opportunities aren't in chasing those kind of fastest growing
or biggest segments, knowing that electrification journey is going to unfold just maybe at different
speeds than people thought initially. But the bigger key really is exploring those white space
opportunities where there are fewer competitors. And I'm wondering if you could talk more about
why that is and what you're arguing there. Yeah. So I guess taking a step back, the thing to
appreciate is that like a EV company, a pure EV startup is making one bet, right? And they
have no IP that they can rely on to make money in any other way. So it's like a make or break
scenario of like how they go all in. There's a reason that so many of them have gone bankrupt.
If we think of our traditional OEMs and the suppliers, they've been making money for a long
time. And as a result of this, like they actually have this huge background of IP,
and that IP plays in spaces that can be really profitable. And so what you can do with that is
in many cases, you can, you don't have to exit, right? Or you can extend into a different segment
at a much lower cost than an EV upstart. It would literally be unapproachable to them in many cases,
right? Like you're talking about an internal combustion engine, you're talking about electrifying
parts of that internal combustion engine in the case of hybrids. And the reality is like
that hurdle of the first time investment is much, much bigger than the idea of taking a power train
and say shifting it into a new segment or taking a vehicle and crossing it into a segment,
if you can reuse that platform there. And so because you have that lower hurdle,
right, your profitability in that segment, because you have that IP root, can be dramatically lowered
and therefore it can be very interesting for you to maintain that position, especially as these
segments become less competitive, right? Like the refreshers are changing the technology investments
to continue participating are slowing. And so it can actually make the whole economics tilt
if you're coming in from a place where you have technologies you can bring to bear.
That it gets you there maybe faster and at less cost?
Yes. Simply said, that's probably a better summary.
You know, and on that economic point, I think, you know, you think you noted that, you know,
those, those faster growing segments, you know, they're going to require more upfront capital
investment, you know, maybe more incentives if there's more competitors in that, in that segment.
But those, those that are kind of growing at a slower pace, you know, especially around EVs can,
can be more favorable on the economic side. I think you kind of talked about that a little bit,
but maybe expand on it and kind of why that, that dynamic is, you know, when you're in a place where
you know, it's growing quickly, it seems like, you know, that's where the customers are.
Why would it maybe not make as much sense for them to jump into those segments from a financial aspect?
Yeah. So every auto AM is looking to have like the superstar of a segment, right?
Or to hit like a hurdle that breaks even. So 100,000 units a year and a segment is
break even ish. And then above that, you start to make more and more margin.
If you play in a big segment, like you can get one or 2% or 3% market share and make it to that
hurdle. However, if we think of like a midsize SUV, you're probably competing as 40 or 50 players.
And so like, maybe like your odds are reasonable in that sense. And like you could see a line of
thought where you'd get there. There are also segments that are smaller, right? Like sedans
are shrinking, for example. But the number of players is like dramatically reducing while
there's still quite a meaningful amount of volume there. And so if you have a subant sedan and you
have a hybrid, the ability to play there where you're playing against maybe three to five players
and still hitting that 100,000 mark or maybe 80 or 60,000 mark because your investments are so much
lower can become really feasible if you have the right starting point. And so like you can make
those trade offs. So it's like, do I want to compete against 50 people or do I want to create
against five people? And so you just need to figure out like, is it a 50 person cake in both of them
or like a 10 person cake in both of them? But 10 divided by five is better than 50 divided by 50.
And you gave a couple of examples, I think, in thinking about how to walk through this sort
of scenario planning. And one of them was midsize pickups. Walk us through that scenario and kind
of explain what it means for automakers, you know, sort of on the ground as a practical example.
Yeah. So midsize pickups have been like a well protected space, right, for quite a bit. Like,
there aren't a huge number. It's pretty well dominated by a couple of players right now.
You actually saw some people leave and come back. And there were like economics in the decision to
come back, right, which was they had platforms and they can move in. It's not as big as the full
size pickup segment, which has more players in it. And so if we look at that midsize pickup segment,
what you could see is like, under certain situations, it'd be really hard, right? So if you're
engineering your first pickup platform, you're engineering the engine, it's really hard to
come into this segment and say, Hey, I'm going to do great. Whereas if you have the powertrain,
or you have the chassis, right, like you could look at this segment and say, Hey, it's substantially,
it's not as big as the full size, but there's less competition and I can get into it at a reasonable
amount of investment. And then dividing this against the handful of players that are there
can become really interesting, right? Like you don't have to believe you need that much
market share to get to a really meaningful amount of money to make it a profitable segment.
Especially if you look at the white spaces within that segment, like there's very limited
hybrids there. And so like there's a niche to go in and play. And that's true for
other segments as well, if you look around the space of the US automotive landscape. So it was a
good example. And that example, I think dovetails on another scenario that you were kind of outlining
here, you know, two kind of possible options. The idea of, you know, a full EV tipping point
coming quickly and, you know, hybrid surging for a while as full battery electrics take longer to
materialize. I want to get back to the midsize pickup example, but I want first to see if you
can kind of walk through those two scenarios, those possible outcomes and what that would mean for
automaker profitability and portfolio decisions. Yeah. So BCG has been working for quite a while.
I'm like, how fast the tipping point will occur. And so there's always been somewhat of two camps
of, hey, it's going to convert really fast because of TCO and policy that supports it and how we
reduce the cost of these vehicles. And then there's the other camp that takes a view like it's going
to be hard to get consumer adoption. People don't like change. They have these things they know
there's a whole bunch of infrastructure investments that need to occur. And so it goes slower.
And I think that even over the past two years, we've seen it go from, hey, we're going full
speed towards EVs to the credits have gone off and it went the opposite direction to now with
oil prices going back through the roof. People are reopening to the idea of EVs. And so in
analyzing the scenario, like we took two likely outcomes of the world, a slower kind of adoption
where people do become more fuel sensitive right over time. And so that leans more towards a world
with hybrids or a world that could be more policy driven or much higher oil price driven,
where we shift further and further towards EVs. So like the more aggressive transition.
And so if I was advising any OEM, we'd probably look at those as the two most likely.
And we may even go further out to either extreme in some cases, but it's kind of like the right
planning bookend of if you're successful under both of these, you're going to be successful.
That's kind of the end outcome and why we thought it was the right kind of bookends to tell the
story around. I'd like to thank Eric for his time and Lindsay for conducting the interview.
If you'd like to be a guest on the show, have a suggestion or simply want to comment,
email me at glason at auto news.com. And remember, you can listen to all our previous podcasts on
Spotify, iTunes, Google play or on our website, automotive news.ca. Just scroll to the podcast
hub in the middle of the homepage. And don't forget, you can follow automotive news Canada on X,
where we're at auto news Canada. You can find me there too at glason.com. And finally,
you can find us on LinkedIn. Just search automotive news Canada. That does it for this episode of
the automotive news Canada podcast. We hope you'll join us next time. So long, everybody.
About this episode
Canadian auto headlines set up a broader strategy conversation about where powertrain investments can still pay off. The discussion contrasts weak EV resale values with GM’s big Ontario V8 commitment, then turns to Boston Consulting’s view that automakers should hunt for profitable white-space segments instead of only chasing the biggest markets. Midsize pickups and hybrid plays come up as examples, alongside two planning paths: slower hybrid-led adoption or a faster EV shift driven by policy or oil prices.
Used EVs lose value; GM invests in Canada; Stellantis suggests regulatory change. Plus, Boston Consulting Group’s Eric Jesse discusses how automakers can find “white space” to win in different powertrain segments.
