With electric vehicle sales in Canada breaking records every year, the demand is clear, say advocates of EVs.
"There is currently very high interest, and that interest is growing," said Louise Lévesque, director of policy at Electric Mobility Canada, a national industry association that works to advance electric transportation.
Environment Minister Steven Guilbeault last week unveiled the federal government's electric vehicle sales mandate regulations, which include a national target of 100 per cent zero-emission vehicle sales by 2035. In making his announcement, Guilbeault also noted how the Canadian marketplace is already experiencing "a rapid shift toward zero-emission vehicles."
But some observers say the market and demand for EVs is more nuanced, that data shows most Canadians still aren't particularly eager to buy one and that the targets laid out by Guilbeault might be difficult to achieve.
"If we have to get to 100 per cent of new car sales by 2035, the path we're on right now won't get us there," said Niel Hiscox, president of Clarify Group Inc., a Canadian-based automotive research and advisory firm.
"You can't make the transition if the cars aren't there, if they're not affordable."
Recent data shows a growth in electric vehicle sales. According to a Statistics Canada report this month, new zero-emission vehicles (ZEVs) made up 12.1 per cent of all new motor vehicles registered in the third quarter. That represented an increase from the third quarter of 2022, when ZEVs were 8.7 per cent of all motor-vehicle registrations.
In places like British Columbia and Quebec, new electric vehicles account for one in five sales. Meanwhile, there continue to be reports of waiting lists for some electric vehicles.
EV market 'not growing as fast as it was'
Yet total sales don't necessarily reflect the strength of the industry, say some analysts.
"In terms of actual numbers, sales are not flat," Hiscox said. "But what is happening is the rate of growth has dropped."
Electric vehicles "are at record sales. Absolutely true," he said. "But bear in mind, we're starting from a very low base."
While there's growth in the market, it's just not growing as fast it was, he said.
Some recent surveys also appear to indicate a reluctance by Canadians to purchase electric vehicles. A recent study by AutoTrader suggested that EV purchase intention has declined.
It found that in 2023, only 56 per cent of car shoppers who did not own an EV were open to purchasing one for their next vehicle — down from 68 per cent the year prior. As well, online searches for EVs accounted for less than three per cent of overall searches on the auto market. Reasons listed for avoiding EVs included prices, interest rates and inflation.
The average price of all new vehicles in Canada is currently about $66,000, according to Canadian Black Book, which provides vehicle valuation data used by dealers. But an EV is close to $73,000.
Hiscox said be believes that those who have purchased EVs are the "early adopter" consumers — wealthier buyers willing to adopt innovative products.
"And where that's really important ... for the early adopter, they were going to buy an EV no matter how difficult it was made to buy an EV. It's the nature of being an early adopter."
But moving past those early adopters are very different consumers who will be actively comparing the EV option with the internal combustion engine option, Hiscox said. Even if, over the life of a car, a consumer would pay less in expenses for an EV, he said, the higher upfront costs of that vehicle mean "a good chunk" of consumers will decide not to purchase it.
Prices will need to fall dramatically: report
In an October Scotiabank report, analysts Rebekah Young and John Fanjoy noted that current North American EV prices are skewed by the dominance of a few luxury models.
They predicted that the expected rollout of more affordable brands and models should take some of the pressure off prices.
"But it's not a given that innovation alone will substantially bend the cost curve anytime soon given the largely nascent and precarious state of supply chains outside of China," they wrote.
Instead, they forecast that EV prices likely need to be a fraction of today's prices to reach mass market by 2035.
"We found that vehicle prices would need to come down by about a third to even half of what they are today, in relative purchasing power terms, in order for electric vehicles to be affordable mass market," Fanjoy said in an interview with CBC News.
He said statistics show that electric vehicles as a share of all new vehicles registered haven't been gaining much ground.
Huw Williams, a spokesperson for the Canadian Automobile Dealers Association, said that according to the dealers and their national focus groups, the government's EV targets are unrealistic.
"And that's not because we're against EVs. We think the transition is coming, but the time frame to do it in an orderly, workable fashion is not doable," he said.
Charging stations, rebates would fuel demand
One of the biggest problems, Williams said, is a lack of charging stations and infrastructure.
"If Canadians have any money and [having an EV] doesn't work for them, that's a customer who's lost," he said. "And it's going to mean hundreds of other customers who are going to go and spread the message, 'Hey, didn't work for me.'"
What will happen, he said, is people will hang on to their older higher-polluting vehicles, defeating the whole purpose of lower emissions.
Hiscox said three interdependent elements are needed to expand the market: availability of affordable EV products, availability of charging infrastructure and consumer demand.
The cost of EVs will continue to go down as volumes grow, but that will take time, meaning the government will need to step up, he said.
"I do believe governments have a very important role in helping to close that gap. Not forever, but for a period of time."
The real evidence of that is EV penetration in Quebec and B.C., which offer additional rebates to the $5,000 offered by the federal government, Hiscox said.
But when the rebate in Ontario was scrapped by the Ford government soon after it came to power in 2018, sales cratered, Hiscox said.
"So we have the clear data to show us that at this point, while there is that price gap between an internal combustion engine and a comparable EV, the consumer rebates have a big hand to play in helping to close that gap and to be a catalyst for demand."
Interest grows with knowledge
Lévesque, of Electric Mobility Canada, suggested that interest in EV purchases is affected by lack of knowledge about the vehicle.
She said her organization conducted surveys that found the more people learned about EVs, the more their attitudes toward the vehicles changed.
For example, after spending 10 or 15 minutes talking about EVs to those taking the survey, their consideration of the vehicles for their next car purchase went up 20 points, she said.
"And as people learn more about EVs from EV owners — because there'll be more and more of those — this interest will grow," Lévesque said.
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2023-12-25 09:00:00Z
CBMiVWh0dHBzOi8vd3d3LmNiYy5jYS9uZXdzL2NhbmFkYS9lbGVjdHJpYy12ZWhpY2xlcy1tYW5kYXRlcy1tYXJrZXQtZ292ZXJubWVudC0xLjcwNjYyNjTSASBodHRwczovL3d3dy5jYmMuY2EvYW1wLzEuNzA2NjI2NA
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