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Recent major investments by Stellantis (formally FCA), Ford and GM to build electric vehicles (EVs) in Canada is undoubtedly great news for the auto industry, the economy and Canadians. Not only do these investments provide a boost to the economy after the worst contraction on record, they position Canada to benefit from the transition to an electrified transportation fleet.
The big question now is how to get more Canadians interested in purchasing EVs. In the first half of last year, new EV registrations in Canada were only 3.5 per cent of all new vehicle registrations. This is a far cry from the government’s goal of zero-emission vehicles representing 30 per cent of new light-duty vehicle sales by 2030.
Some argue that a lack of vehicle availability is holding Canadians back from making the move to an EV. But with over 40 models available now and 120 coming to market by 2023, availability is clearly not the problem. FCA, Ford and GM alone have dozens of new models coming to Canada, including electric versions of hugely popular SUVs and pickup trucks. And on the ground, inventories across Canada are comparable to their gas-powered equivalents.
According to Deloitte’s 2021 Global Automotive Consumer Study, the real barrier to getting more Canadians in an EV is mounting concern with driving ranges. Between 2018 and 2021, Deloitte found that concerns with driving range have increased by five per cent, with 27 per cent of respondents noting this as their top concern. Another 23 per cent of respondents chose a lack of vehicle charging infrastructure as their biggest EV anxiety, with the time required to charge the greatest concern for 14 per cent.
None of this should come as a surprise. Canada is a huge country with over 1.1 million kilometres of public roads. Driving range will remain a challenge until battery technology evolves to the point where ranges are on par with a full tank of gas and a driver can be confident that fast-charging stations are readily available.
The federal government deserves credit for investing in charging infrastructure, including $130 million in Budget 2019 to deploy a network of zero-emission vehicle charging and refuelling stations. But with only 971 publicly accessible fast charger stations available to Canadians right now, we have a long way to go to reduce range anxiety.
The second greatest concern Canadians have with electric vehicles is the price premium. Twenty-five per cent of respondents noted this as their top concern. Thanks to billions of dollars being invested in electrification by automakers, EV technology is advancing rapidly. But price parity with gas-powered vehicles remains years off.
Battery pack costs, the biggest contributor to higher EV prices, are not expected to fall below $100 per kilowatt hour (kWh) until around 2030. Once battery costs hit $100 per kWh, we can expect the price of EVs to be comparable to gas-powered vehicles.
While total cost of ownership of EVs can be lower than an equivalent gas-powered vehicle thanks to fuel and maintenance savings, most consumers are primarily concerned about securing the lowest possible monthly car payment. Not only that, one-third of Canadians are unwilling to pay anything extra for an alternative powertrain, raising serious concerns about demand for EVs in the short term.
Until we address consumer concerns with driving range, charging and price, EVs will remain a small segment of the overall new vehicle market. Getting more Canadians behind the wheel of an EV now is going to require support from the federal, provincial and municipal governments.
Fortunately for Canada, there is one jurisdiction in the world that has found the solution to boosting EV adoption. Last year, 54 per cent of new vehicle purchases in Norway were of EVs, making it the undisputed global leader in EV adoption.
Consumer incentives are the cornerstone of Norway’s EV policy, with everything from tax exemptions and reductions on purchases and licensing to free toll-road access, free charging and free parking for EV owners. According to the International Energy Agency, measures that reduce the purchase price of electric vehicles have been the main driver of electric vehicle adoption.
We have significant ground to make up to meet the government’s 2030 zero-emission vehicle adoption targets. But with the right mix of incentives in place that address Canadian drivers’ needs, the target is obtainable. Just ask Norway.
Brian Kingston is president and chief executive officer of the Canadian Vehicle Manufacturers’ Association.
Comments
I'm indifferent about Canadians driving on electricity vs synthetic fuel. What I want to see is empty seats being the exception, not the rule. We seem blind to all the excess we have been sold. A bicycle can carry ten times its weight, but most cars average under 10% payload.
There is a huge difference in terms of both efficiency and the impact on the climate, between electric and all other fuel types. Since cars are here to stay, our focus should be on choosing the energy source that is least destructive of the environment. Saying that we need more people to ride bikes is like saying we need more love in the world: it's true, but it ignores the reality that cars are going nowhere.
This article is too simplistic. The economic circumstances of Norway are very different from Canada including a VAT (HST) rate of 25% and very low, hydro electricity prices. Ontario has highly subsidized electricity prices so the transition from taxed and largely unsubsidized gasoline and diesel to highly subsidized electricity will be very problematic for provincial finances. In Norway many drivers buy highly subsidized electric cars for local commutes (they cannot afford not to!) and retain gas and diesel powered cars and SUVs for longer journeys, particularly in winter when EV range is reduced because of battery limitations. EVs do not solve traffic congestion problems and highly subsidized ones will only make them worse. Personal transportation is more than just about cars.
Any direct losses from the subsidies to electricity fuelling cars will be more than made up by various reduced costs, from the carbon itself to more local benefits such as public health benefits from reduced air pollution, which recent studies show are huge.
Not to say there shouldn't also be very big outlays for transit. But there are going to be individual cars, and those individual cars should be electric. Period. Whatever subsidies it takes are more than justified--we have to be picking winners on this.
Well said, Rufus. Agree that there are many other costs that are reduced. I read about a study that said that every EV on the road saves the province about $10,000 in health care costs.
And the biggest bang for the buck is in electrified public transit and commercial trucks, both in terms of reduced emissions and in terms of cleaner air for better public health, so yes, there should be big outlays for electrified public transit. China has deployed 100s of thousands of electric buses so far, and there European cities are quickly adopting e-buses. There are even South American cities like Bogota who are ordering hundreds of e-buses at a time. Unfortunately Canadian cities are slow on the uptake.
When I read comments like this, it becomes clear why Canada is so far behind the curve in terms of adoption of EVs. Politicians are responding to the ignorance that comes from voters who have never owned an electric car, and who think gas cars will be around forever. EVs are about 80-85% efficient, whereas internal combustion engines are around 20%. Just that one piece of information should be enough to convince anyone that electric is far superior to gas. EVs are *definitely* the future, and the sooner Canadians understand this, the better off we'll all be.
Yes, there is a lot of misinformation about EVs, both politically motivated and just from a lack of education. A concerted education campaign would go a long way to shifting popular opinion.
While I was hopeful about the article at first, it's more or less about why Canada is so far behind the curve, because it appears to be from the point of view of legacy auto manufacturers who have had up until now very little imagination about what can be done with EVs. They are still saying that they're too expensive and the batteries aren't good enough and there's not enough demand, and I'm not sure they're ready for the transition that's going to hit them. All of their investment and value tied up in knowing how to build transmissions and Internal Combustion Engines will become relatively worthless long before 2030, as battery prices plummet. At the same time, producing compelling affordable EVs isn't nearly as easy as they think it is, for a whole bunch of reasons.
I'd like to see a ban on advertising of non-electric vehicles... The TV in particular is overwhelmed with ads for gas-guzzlig Recreational Vehicles and pick-ups. I almost never see an ad for an electric vehicle and definitely not for an electric truck of any kind. The government should also give sales tax incentives: no taxes for electric vehicles and increases taxes on petroleum-using vehicles. GET SERIOUS.
I question the premise at the beginning of the article, "The big question now is how to get more Canadians interested in purchasing EVs".
The article may talk about inventories being comparable, but I know when I bought my Leaf I had to wait months for it. And most of the models of EV either don't exist yet but rather are announcements about what will exist in the future, or aren't sold in Canada, or are high end small-volume luxury vehicles. What's left is all basically the same kind of car--specifically, small. Either little hatchbacks or little sporty cars like the Tesla model III.
There is, for instance, nothing like an electric RAV4, there are for practical purposes no electric pickups (there are a few high-end toys and very impressive they are, but nothing mass market).
It looks as if in the next few years there will be mass produced EVs from many manufacturers in a variety of models that are likely to actually be sold in Canada; at that point we may finally find out what the real demand is. It still won't be high enough, we'll still need subsidies to boost that, but it's almost certainly higher than the current supply-constrained situation makes it seem.
I think the range worries will gradually go away by themselves, for a variety of reasons. One is that EV ranges keep getting longer. And charging station availability does keep expanding. But above all . . . did a road trip in our Leaf with 240K range, so not even as good as a current Tesla. It was FINE. As more people own EVs and more people talk to people with EVs, as they become more familiar, they'll realize the stuff they're scared of just isn't scary. Although the Trumpy climate deniers might have their own alternative reality bubble for a long time. But even that will wane as the fossil fuel lobby loses wealth and stops being able to sponsor as many think tanks and bots and social media agitators.
The cheapest Tesla Model 3 currently gets 423 km; the long-range versions gets 568 km. Range isn't the issue any more. I drove to Austin, TX, last winter, and Sarasota, FL, the year before that, in my 3 year-old Model 3 that gets 500 km per charge. Charging along the way was quick, easy, and cheap.
The cost to run it is about 1/5 or 1/6 that of a gas car. If you factor in that you'll never need to do an oil change, and may never need to change the brakes (because of regenerative braking), along with never needing to visit a gas station, never needing to do an engine tune-up, and that the only fluid you'll use is windshield wiper fluid... gas cars just look dumb, stinky, and annoying. Also slow.
I think we're already past the point of subsidies, and you're right, it's not the demand, it's the availability. Battery prices are already getting low enough that they could make EVs much more affordable,but almost no one besides Tesla had the foresight to line up enough battery supply to supply the demand for their EVs.
To see what actual demand looks like, we could look at Europe, with it's much harder emissions regulations- 2020 sales of EVs jumped to over 10%. Most manufacturers are sending all their EVs to Europe to satisfy the demand and meet the regulatory requirements. China and California and Quebec follow the same pattern: properly designed regulations are what drive EV sales at this stage of the EV transition. Subsidies help, but they probably allow manufacturers to sell EVs for higher prices and pocket more profit on them, while still limiting availability so they can keep selling ICE cars.
I don’t know where most people live but where I do, bicycles are not very feasible and public transport isn’t that great either. I drive a Toyota Prius and I realize there are grave concerns about lithium batteries but at the moment it is the best I can do. There is no infrastructure here and the driving range is also a grave concern. I talked to one young man who said he would never drive a Prius because he is a speed demon with a love affair with sports cars. When I said he didn’t seem to be very concerned about his carbon footprint he said didn’t care if he was contributing to climate change. He is one of the millennials who are blaming the baby boomers for everything so feel entitled to do anything they desire. This attitude on everyone’s part needs to change right now!
Maybe You could tell this guy that EVs are much faster than fossil cars? Because they are. Better cycling infrastructure and better public transit is the best thing for reducing emissions and for public health, but the private car isn't going away fast, so installing good infrastructure for EVs is also important.
Also, the grave concerns about lithium batteries are pretty minor compared to the damage that oil extraction and refining does. The amount of Cobalt in EV batteries is quickly being reduced and there are many new chemistries coming out that use no cobalt at all. EV batteries can also be almost fully recycled, and there is now a rapidly growing industry for recycling them.
As a big fan of EVs I was hopeful when I saw this article, but was kind of disappointed when I read it. It seems more like a rationalization for slow-rolling the transition to electrified transport, rather than providing any ideas or information on how Canada could accelerate its transition.
- apart from Tesla EVs, lack of availability is indeed a problem in Canada, so while there are dozens of new EVs coming out now, many of them are being primarily sold in Europe and China, primarily due to better regulations. The main problem for potential Canadian buyers is that they have to wait months to get an EV if they really want to order one, or the dealers aren't interested in selling EVs, and try to get EV buyers to buy the fossil cars that are on their lot instead.
- the main reason it sounds like slow rolling to me is that the author is incorrect about battery prices hitting the sticker price parity of $100/kwh in 2030. THe price premium for EVs will soon lose it's rationale. Chinese battery manufacturers are already under this price with their LFP batteries, and Tesla is currently around that battery cost, and will be well under this price within 2-3 years when they get their factories going for their 4680 cells. What this means is that manufacturers who have paid attention to battery supply and have access to enough lower cost cells will be able to produce EVs at the same sticker prices as fossil cars sometime within the 2023-2025 time frame. That's the point that the transition will really take off, not some time after 2030.
- the main reason fossil manufacturers want to keep the price premium on their EVs is because as soon as their EVs are the same price as their fossil cars, they'll hemorrhage sales of their fossil cars to their EVs. If they keep the EV price premium and keep the availability low, they get to sell a few EVs at a profit, while still selling their fossil cars.
- While Norway's transition to EVs (they are now at 80% of car sales being plugins) is remarkable and a great thing to watch, much of what they have done isn't transferable to other jurisdictions. Years ago they implemented a full emissions tax on fossil cars, so their subsidy for EVs isn't really a subsidy, it's applying the external costs to the fossil vehicles. Canada's carbon tax does move in this direction, but not close. Canada would be better to look at the rest of Europe, where new emissions regulations have causes a massive jump in EV sales as manufacturers suddenly have to work to lower their fleet emissions. The demand was always there, the EVs were not.
- the author is right that Canada does need better charging infrastructure: knowing that if you're driving from Ottawa to Toronto that you're not relying on one slow charger that's either busy or broken most of the time makes the trip with an EV much better.
- the author doesn't seem to understand that EVs don't need to have the same range as a fossil car. Perhaps because he misses the point that most EV charging is done at home, and is super convenient. Nightly charging at home easily covers most people's daily driving, and plugging in when you get home takes 10 seconds. No weekly trip to the gas station. Also no need to haul around hundreds of kg of extra batteries you don't really need. Yes, there is a proportion of car buyers who won't transition until range is over 600km, and they will eventually get their EVs, but there is a large market of Canadian drivers who would be perfectly happy with 300-400km of range (especially if the charging infrastructure is there for the occasional longer trip, as newer EVs already charge much faster than the ones from a few years ago.)
An EV with 300-400km of range covers all daily driving needs for most people, and can be used for longer trips without too much inconvenience. In many cases, around 200km of range can be gained back with around 20-30 minute charging stop, giving everyone in the car time to go to the bathroom and get some coffee and food while the car charges. I know some people would find that inconvenient, but that was the normal pattern for me and my family with a fossil car anyway.
Availability, not interest, is the issue. I had to wait six months, put down $1,000, and buy my Bolt sight unseen three years ago. Not much has changed. The author's link to charging infrastructure is entirely misleading. It shows stations that do not exist yet and omits those that do exist here in northwest B.C. Charging infrastructure is the biggest problem by far. Many northern highways have no chargers at all, and the build-out is painfully slow. Range ceases to be a concern if you have a decent charging infrastructure - not something the author seems to understand. It will also help to bring reasonable pickups to market. Not the expensive funmobiles, but a real working pickup for rural dwellers and tradespeople.