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Canadian EV market slows Ottawa’s path to clean transportation

Meena Bibra, senior clean transportation policy adviser for Clean Energy Canada, says Canada's on track to meet its EV goals. Photo submitted by Meena Bibra

If Canada wants to meet its electric vehicle (EV) goals, experts say the federal government must tackle key “bottlenecks” slowing the adoption of emission-free vehicles.

The federal government has mandated that by 2035, every passenger vehicle sold in Canada will need to be electric. But despite Ottawa’s efforts to boost the sale of clean vehicles and Canadians' willingness to buy cars, data from market intelligence agency S&P Global shows the country’s adoption of EVs is inconsistent across the country and slow in most provinces. Experts said to get Canadians to buy EVs, monetary incentives like rebates need to be paired with provincial policies that address other concerns about green vehicles, like range anxiety and vehicle supply.

Meena Bibra, senior clean transportation policy adviser for the think tank Clean Energy Canada, said despite the dip in the rate of sales, Canadians were still buying EVs. About one in every 11 cars purchased in Canada were zero-emission vehicles (ZEVs), according to S&P Global.

“Sales did dip slightly but what really came to mind was to look at the overall patterns,” Bibra said. “It was a very promising sign of where the industry is headed and how it's going to continue to grow.”

The report from S&P Global shows the industry faced a “slight contraction” in the first quarter of the year: New vehicle registrations dipped about 1.1 per cent compared to the end of 2022. This was mainly due to a decrease in volume in Ontario and Quebec.

Electric vehicle sales in Canada dipped slightly at the start of the year. Experts say it’s up to provinces to offer strong policies — not rebates — if Canada wants to meet its EV goals.

The number of rebates for EVs, however, soared. Data from Statistics Canada shows the average number of EV rebates issued per month jumped from about 4,200 to 5,800 in the first quarter, then above 10,000 for April, May and June.

During the first quarter, overall vehicle sales were up. According to market research company DesRosiers Automotive Consultants, during the first quarter of 2023, Canadians bought 3.7 per cent more vehicles than the previous year.

Werner Antweiler, an economics professor at the University of British Columbia, says the uptake of EVs is “a checkerboard” across the country.

“In some places, it's going well, like in B.C. and Quebec first and foremost, and in other areas, it’s clearly not,” he said.

Canada’s EV transition is dominated by just three provinces. Just more than a third of Canada’s EV registrations are in Quebec, while Ontario and British Columbia account for nearly 30 per cent each. Alberta, in fourth place, accounts for only 3.7 per cent of new electric vehicle registrations across Canada.

Antweiler says the slow uptake is due to a few key “bottlenecks,” including the cost of EVs and a lack of charging infrastructure. He said the national federal rebate, which offers Canadians up to $5,000 on new ZEVs, can help Canadians, but only if other issues are addressed locally.

Bibra said provinces need to make sure residents have access to enough EVs to meet demand.

“Vehicle incentives are important. They bring down the higher purchase cost of these electric vehicles,” Bibra said. “But these incentives don't work when there aren't any vehicles on the lot to even purchase or to even lease.”

British Columbia and Quebec, the two provinces with the most EV adoption, both require automakers to sell a certain number of electric vehicles. British Columbia offers income-scaled assistance for purchasing clean cars and Quebec has an EV rebate, while Ontario ended its rebate program in 2018. Alberta has no provincial program to help residents pay for EVs.

Antweiler said in areas with less urban concentration, like the northern territories and the Maritime provinces, governments need to address range anxiety — the fear that people won’t be able to drive as far in electric vehicles — by increasing charging stations across the country. He said there is an effective policy in B.C., which offers rebates for charging stations and has cut red tape for strata corporations to install charging stations at multi-home units.

Currently, Canada has just under 9,000 charging stations — most of which are concentrated in the country’s south.

Automakers releasing new electric models might help EV adoption. The report from S&P Global notes that by next year, 41 new models of low-emission vehicles will be available in Canada, including several kinds of pickup trucks.

“That is absolutely crucial. We won't actually get to the electric vehicle transition without more choice,” Antweiler said. He said Canadians need a range of EV models — like trucks, minivans and sedans — to suit their lifestyles.

Instead of incentives, Antweiler said the best policy to get Canadians into EVs would be to penalize drivers of gas-powered vehicles with a carbon tax.

“The first best policy is to put a price on pollution,” he said.

At its current pace, Antweiler said it is unlikely Canada will meet the federal government’s targets for electric vehicle adoption. However, Bibra was a lot more hopeful.

“When you do look at the overarching patterns of what's happening in the country, they're pointing forward,” Bibra said. “Canada is moving forward; this situation is going to become more and more optimistic.”

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