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Why Canada Is Helping Fiat Chrysler Build a Hybrid Minivan

June 15, 2016, 8:29 PM UTC
Courtesy of FCA/Photo by Webb Bland

Fiat Chrysler Automobiles is getting a little financial boost from Canada to help the automaker produce its first high-volume, plug-in electric vehicle.

FCA (FCAU) and the government of Ontario, Canada announced a partnership on Wednesday to support the research, development, and production of the Chrysler Pacifica Hybrid minivan. Under the partnership, the Ontario government will give $66.51 million USD ($85.8 million CAD) to FCA for funding research at the company’s Automotive Research and Development Centre (ARDC) center in Windsor, Canada. The funds will also be used to train factory workers at FCA’s assembly plant in Windsor as well as make improvements at the plant related to the production of the Chrysler Pacifica Hybrid.

The announcement was made at an event celebrating the 20th anniversary of the R&D center.

The Ontario government is supporting the automaker indirectly as well by investing $20 million to help create a network of fast-charging electric vehicle stations in cities and along highways. The Chrysler Pacifica Hybrid will be eligible for rebate incentives under the province’s new Climate Change Action Plan.

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FCA says the project will safeguard the assembly plant, which currently employs 4,000 people. FCA is a major employer in Ontario. More than 11,000 people work at FCA’s Canadian headquarters in Windsor, their assembly plants in Windsor and Brampton, a stamping plant in Etobicoke, and an R&D center created in partnership with the University of Windsor. FCA has invested in excess of $2 billion to benefit its Canadian operations in the past 18 months, according to FCA Canada President and CEO Reid Bigland. The plant has hired another 1,200 to support production of the hybrid minivan.

FCA requested as much as $700 million from the Canadian government in 2014 to support the new Chrysler Pacifica minivan, which required extensive upgrades to two assembly plants, according to Canadian news reports at the time. CEO Sergio Marchionne abruptly withdrew the request because projects were being used as a “political football,” he said at the time. FCA ended up investing its own money into the two assembly plants.

This isn’t the only electric vehicle FCA has ever made. The company has sold the Fiat 500e since 2013. That it doesn’t mean the company is bullish on electric cars. Marchionne has said Fiat only produces the 500e to meet emissions regulations in California. Several years ago, he even urged people against buying his own company’s electric car because it was unprofitable. In April, Marchionne raised serious doubts about Tesla’s ability to turn a profit selling its newly-unveiled Model 3 electric car for $35,000 (TSLA).

The Pacific hybrid is important, not just because it’s electrified. This is the same vehicle that Google (GOOGL) is going to use for testing autonomous vehicle technology. Google, which wants to commercialize self-driving cars by 2020, said in May it plans to double its fleet of self-driving cars for testing by adding about 100 Chrysler Pacifica Hybrid minivans. The tech company and FCA will work closely in the coming months to design the minivans to easily accommodate Google’s self-driving systems, including sensors and computers.

Google and Fiat’s autonomous minivan might actually be a hit. Watch:

Perhaps not so coincidentally, Ontario is the first Canadian province to allow on-road testing of automated vehicles.

Last week, General Motors announced it was adding hundreds of software development and engineering jobs in Canada to focus on autonomous vehicle software, advanced safety tech and infotainment technology. The company says it will eventually have 1,000 engineers in Canada working on these three areas. The new hires will push GM (GM) beyond its capacity at its Oshawa Tech Center. To accommodate the expansion, GM is opening a new automotive software development facility in Ontario.