Is it time for you to buy an electric car? You may be answering ‘yes’ to that question sooner than you think. Because things are about to change rapidly.
By 2026, 20% of all passenger cars, trucks and SUVs sold in Canada will be electric vehicles (EVs). By 2030, that number jumps to 60%. And in 2035, every vehicle sold in Canada will be electric.
These are no longer unenforceable targets, but regulated mandates, per Environment Minister Steven Guilbeault, who announced them in December 2022.
So, you may be wondering – how exactly is all this going to happen?
Canada is – seemingly – a long ways off from being able to hit those targets. EVs make up about one out of every eight sales of new cars in the world. In Canada, however, that number is just one in 14. Without further joint action by automakers, governments and consumers, Canada could fall far short of its goals. And that’s before you realize that broad-scale EV adoption requires the provinces and federal government to play nice with each other — not always their strong suit. Ultimately, you’re forgiven if you’re feeling a little skeptical about EVs.
So, why are we likely to see such accelerated change?
By no later than next year we’ll see price parity between electric passenger vehicles and traditional (internal combustion engine) passenger vehicles. And that’s just one important area where all trends are pointing towards an electrified future.
Here’s a look at the key questions Canada will need to answer to meet its EV ambitions.
How will Canada respond to the U.S. Inflation Reduction Act?
Government policy. Sure, it can get a little boring, but stay with us here because this is critical stuff.
The U.S. has previously been accused of dragging its heels on the energy transition (and EV adoption). Not anymore. It’s now moving ambitiously and aggressively, and they’re going to drag Canada along for the ride.
In August 2022, U.S. President Joe Biden signed the Inflation Reduction Act (IRA) into law. The legislation commits almost $400 billion (U.S.) over 10 years to clean energy, including a combination of grants, tax credits, and loan guarantees. The legislation includes significant tax credits for the purchase of EVs, incentives for upgrading charging infrastructure, and other measures that will accelerate EV adoption.
The IRA is a signature piece of legislation in the battle against the climate crisis, and it has been received as a game-changer for the energy transition — and EVs. In fact, many countries are now scrambling to respond to the legislation to stay competitive, and Canada is no exception.
Deputy Prime Minister and Finance Minister Chrystia Freeland recently told reporters the Inflation Reduction Act has changed the playing field with respect to competition for global capital.
Freeland: “I cannot emphasize too strongly how much I believe that we need to seize the moment and build the clean economy of the 21st century. This is a huge economic opportunity.”
While Canada has already put policies in place to incentivize clean energy, electrification, and EV adoption, we’re likely to see a whole different level of policy ambition, starting in this spring’s federal budget.
Freeland and the federal Liberals are ready to go big.
Can Canadians even get electric cars if they want them?
Okay, this is a problem. Demand for EVs is increasing in part because of the available rebates — including up to a $5000 tax rebate from the federal government on top of provincial subsidies — but there is a lack of supply and long waiting lists around the country. At what point does a consumer look at a 12 or 15 month wait time and say, “I’ll just get another ‘normal’ car right now?”
The National Observer recently reported that even the feds are struggling to electrify Canada’s public fleets in part because of how global supply chain delays have affected vehicle availability. The pandemic, the war in Ukraine, and shortages of key materials like chips are all constraining local supply of finished EVs.
The good news here is that automakers are taking advantage of incentives (both carrots and sticks) and ramping up their production. Today, availability is a huge problem, but that’s going to be temporary.
Automakers see the economic opportunity the same way the federal government does and most of them are planning for a fully electric future.
Will Canadians be able to find places to charge their electric vehicles?
There are two issues here: charging at home and charging on the go. And — stop us if you’ve heard this one before -— Canada is way behind on both.
We’re finally moving faster on charging options for people away from their homes. The federal government has announced that it would invest in 50,000 new charging stations across the country by 2027. That would bring federally funded charging infrastructure to 85,000 units.
It’s trickier at home. While homeowners will be able to take advantage of tax incentives to make sure they can charge their vehicles at home, more than a third of the country doesn’t live in a detached house. And some of those that do are renting and can’t necessarily install charging stations without landlord approval.
Imagine the charging challenge in a city like Toronto or Vancouver where millions live in apartments and condos. How does a high-rise apartment provide enough charging capability for all the people living there? Will residents be forced to use public charging infrastructure? How much will that push them away from buying EVs?
There are no easy answers to these questions.
Will Canadians trust electric vehicles not to leave them stranded in the dead of winter?
‘Range anxiety’ is the phrase used to describe the fear that an EV won’t be able to get you to where you need to go without running out of charge.
‘Don’t want to end up stranded on the highway at thirty below’ is the phrase some Canadians use to explain why they don’t want to buy an EV.
Range anxiety used to be a huge issue for prospective buyers, but the majority of vehicles available in Canada now offer between 300-400 km per charge, if not more. That’s plenty for daily commuting and weekend errands. And with a national network of fast-charging stations, even long trips become less stressful.
But. (And there’s always a but, isn’t there?) EVs underperform in cold weather.
And Canada is one of the coldest major countries on earth.
A recent report found that EVs can lose up to 30 percent of their range in freezing temperatures. Innovation may eventually cure that problem. Or not. But until then, consumers will need to balance price, tax incentives, lifestyles, and charging infrastructure in making their purchase decisions.
Here in early 2023, it’s easy to see them landing on the side of ‘waiting until later’.
The bottom line on EVs
There is no argument about the future of EVs. They are going to become the dominant, and eventually exclusive, vehicles on our roads.
The real question is how fast that happens.
For perhaps the first time in history, government policy, consumer interest, manufacturer intent, and climate urgency are all finally working together to drive change. Change can rightly be seen as far away, but it’s also oh-so-close.