Ottawa’s new bid to replace gasoline-powered cars with electric vehicles won’t make a big difference in spurring sales — which are rapidly increasing on their own — but it could make it easier for people across Canada to get their hands on an EV, instead of languishing on a year-long waitlist.
The federal government this week revealed its plan to ban the sale of all new gas-powered cars and trucks by 2035, a policy aimed at eliminating one of the largest sources of greenhouse gas emissions in the country.
The phase-out of gas-powered vehicles will rely on a sales mandate that will require 20 per cent of all new cars, SUVs and pickup trucks sold to be electric by 2026. The required proportion of zero-emission vehicles (ZEVs) will ratchet up to 60 per cent by 2030 and 100 per cent by 2035, according to draft regulations announced Wednesday.
With an average life span of 15 years, Ottawa estimates that will mean virtually all gas powered vehicles will be off the road by 2050.
Electric vehicles and hybrids currently account for 9.4 per cent of all new vehicle sales in Canada, according to S&P Global Mobility data, and that number has been doubling every two years.
This suggests the government’s new requirement that 20 per cent of car sales are zero-emission vehicles (ZEVs) will be met well before 2026, without any government intervention.
But it’s supply, not demand that’s throttling the market, says Cara Clairman, president and CEO of Plug’n Drive, a non-profit that promotes electric vehicles and arranges test drives.
“To be fair to automakers, there’s huge global demand and they’re ramping up. But there’s only so much they can do,” she said. “They’re making loads of EVs, but they’re all going to China and Europe and California.”
“This is about making them available to Canadians.”
Provincially, Quebec and British Columbia brought in their own ZEV sales mandates in 2018 and 2020, respectively. As a result, those provinces now account for the majority of all new ZEV sales in Canada.
This leaves prospective buyers in the rest of the country to fight over the dregs of supply.
In October, the Star found waitlists for EVs in Toronto were almost 11 months long on average, double the wait times elsewhere.
“The bottom line is there’s a real supply crunch right now in Canada, and we know that these sales targets work,” Clairman said. “They work in B.C. and they work in Quebec.
“So the idea is to make them available to Canadians in other provinces.”
Ekta Bibra, a senior policy adviser on clean transportation at Clean Energy Canada, said not only will the regulations even the provincial playing field between provinces, they’ll also push carmakers to offer more affordable electric options.
“It’s more profitable for them to sell luxury EVs,” she said. “Like all publicly traded companies, they’re looking to their next quarterly results.
While EVs can cost thousands of dollars more than similar gas-powered models upfront, a study by Clean Energy Canada showed that because they’re so inexpensive to charge and require very little maintenance, they will end up saving owners more than $10,000 over eight years.
That number rises to almost $18,000 if gas goes to $2 a litre.
The federal government currently offers a $5,000 rebate to subsidize the cost of purchasing an EV (some provinces add up to $5,000 more) and 180,000 people have taken advantage. But subsidies have proven to have less of an impact on EV adoption than sales mandates.
“This is what this regulation is about: ensuring that more affordable EVs are made available,” Bibra said.
The auto manufacturing sector, however, is pushing back against the mandate, saying the government can’t regulate away global supply chain issues.
“Automakers are investing over $1 trillion in electrification tech and this is going to bring online capacity to build tens of millions of vehicles,” said Brian Kingston, president of the Canadian Vehicle Manufacturers’ Association.
“The reality is this is a transition and it takes time. A complete new supply chain is being built.”
Instead of trying to dictate where EVs should be sold, Ottawa should be focusing on making it easier for people to own EVs by building more charging stations, an area where Canada is lagging, Kingston said.
While the federal government has promised to spend $1 billion on installing 85,000 public chargers across the country by 2027, California is setting a much more ambitious pace by targeting 250,000 chargers by 2025.
Flavio Volpe, president of the Auto Parts Manufacturer’s Association, said the regulations push sales targets too high too fast, which will reward battery manufacturers in China and elsewhere because Canada’s EV supply chain simply isn’t up and running yet.
“It’s impossible to meet the targets at the rate they’ve set them without supporting China,” where battery production creates lots of emissions, he said.
“This is Canadian public policy forcing extra pollution in China in order to meet Canadian tailpipe emission targets,” said Volpe. “They need to go back to the drawing board.”
Daniel Breton, president and CEO of Electric Mobility Canada, said in his view the pushback from the auto sector was both predictable and “nonsense.”
“Let’s face it, were it not for regulation and Elon Musk, most car manufacturers would not be making EVs today,” he said.
“While some people may say that we don’t need regulation, history has taught us otherwise.”
For years, carmakers not only avoided planning for an electric future, they actively resisted it, Breton said, because gasoline cars are more profitable and developing electric cars would cost a fortune. All this changed when Tesla’s wild popularity forced the entire industry to start offering EVs.
“And now they’re caught with their pants down and they’re scrambling to set up battery manufacturing and supply chains,” he said.
Canada is also playing catch up with many jurisdictions that have already announced EV sales mandates.
California — where 18 per cent of new vehicles sold are EVs — announced similar regulations in 2020, banning the sale of new gas and diesel-powered vehicles by 2035. In October, the EU followed suit.
The U.K. has an even more ambitious target of 2030.
Even some auto manufacturers have pledged to proactively phase out gas vehicles by 2035, with Nissan and GM having made the commitment last year.GHG emissions from transportation make up 24 per cent of all emissions in Canada, according to the government’s latest numbers. About half of this comes from private passenger vehicles, with the rest coming from trucking and rail.
The federal government is currently developing regulations that would transition the trucking industry to zero-emissions by 2040.