Brian Kingston is president and CEO of the Canadian Vehicle Manufacturers’ Association.
The electric vehicle (EV) transformation is rapidly picking up speed, with automakers committing an estimated US$1.2-trillion to electrification through 2030 to build tens of millions of electric vehicles, more than double the amount from only one year ago. As more EVs come to market, countries around the world are rapidly building charging infrastructure and supporting citizens in the transition to electric.
But while other countries race ahead to an electrified future, Canada is driving on a low battery.
According to the EV Readiness Index, developed by global accounting firm Ernst & Young, Canada has fallen from eighth place in 2021 to 13th in 2022 of the world’s top 14 vehicle markets. The main reasons? A lack of ambition on charging infrastructure and consumer incentives.
The most recent assessment of charging needs suggests that for every 24 EVs on the road by 2030, Canada will need one public charger. Compare this with California, a jurisdiction Ottawa often co-operates with on climate policy, where the California Energy Commission estimates that every 12 EVs on the road will require one public charger by 2030.
With 1.1 million kilometres of public two-lane roads, a colder climate and 18 per cent of the population living in rural areas requiring longer drives, Canada will need more public charging infrastructure than California, not less.
Equally concerning is the rate of Canada’s charging infrastructure build-out. As of September, 2022, just 2,500 chargers were operational of the planned 84,500 government-funded chargers. At this pace of construction, government-funded chargers won’t be fully operational until well past 2050, decades after the federal government’s target of 100 per cent EV sales.
Further complicating the charging landscape is Canada’s antiquated approach to charging for electricity. Under current rules, charging companies can only bill customers for the time their vehicles are plugged into a charger. Not only does this create a confusing charging landscape for drivers, it also makes the charging station business model unviable.
With EV sales increasing steadily, a lack of charging infrastructure risks leaving drivers frustrated as more people seek out public chargers. Even when drivers can find chargers, they may be surprised to find them not working due to a lack of standards on charger uptime.
Powering this charging infrastructure is an electricity generation system that needs to grow at least twofold by 2050 to meet Canada’s climate targets. Electrifying a typical highway gas station will require as much power as a professional sports stadium. While forecasts vary on what this will cost, Royal Bank of Canada estimates an all-renewable electricity grid with battery storage could add $7-billion in annual costs, while one with a more diverse power mix would cost about $4-billion.
Add to this the need for spending on EVs to grow from about $4-billion a year to nearly $22-billion, and the disconnect between Canada’s EV ambitions and reality becomes apparent.
The final piece of the puzzle is ensuring that EVs are affordable for everyone. With a price gap of $20,000 between a gas-powered compact SUV and a more expensive electric one (in the most popular vehicle segment in Canada), a federal consumer purchase incentive of $5,000 guarantees that middle- and lower-income Canadians will not have the help needed to switch to electric. In fact, Canada falls outside the top 20 countries globally when it comes to helping consumers purchase EVs.
The combination of these challenges threatens to sink Canada’s EV ambitions well before the federal government unveils its new and unnecessary EV sales regulations. The result will be missed EV sales targets and frustrated Canadians.
The federal government must improve Canada’s EV readiness to support the consumer transition to electrification. By convening all the players with a role in the EV transition – provinces, municipalities, automakers, charging companies, utilities and infrastructure providers – solutions to these challenges can be developed, implemented and tied to Ottawa’s EV sales targets.
Canada can win the race to electrify, but it will take a comprehensive national effort to improve EV readiness.