A bumper crop of more than 20 new electric vehicles, including more than a dozen SUVs and at least one electric pickup truck, is expected to arrive at Canadian dealerships in 2022, which, experts say, will make this a breakout year for battery-powered vehicles.
Among the new electric vehicles (EVs) hitting the market are the much-hyped Ford F-150 Lightning, the first electric SUVs from Toyota, Subaru and Nissan, plus entry-level luxury models from Volvo, Audi and Mercedes-Benz. Unlike most earlier EVs, nearly all of these will be trucks and SUVs – the types of vehicles most Canadians buy – and many of them are mainstream products. EVs are often more expensive than their gas-powered counterparts, but many of these new arrivals should be relatively affordable too.
“A lot of people in the industry think we’re going to hit a bit of watershed moment this year with [EV] availability,” said Robert Karwel, senior manager for the Canadian automotive practice at market research firm J.D. Power. “There’s a lot of excitement, a lot of buzz over these new models, but we’ll see how receptive the public is.”
EVs, also known as battery-electric vehicles or BEVs, accounted for 3.5 per cent of all new-vehicle registrations in the third-quarter of 2021, up from 2.5 per cent over the same period in 2020, according to the most recent Statistics Canada data.
Despite global supply-chain disruptions limiting vehicle production, Karwel predicts the market share of EVs in Canada could jump to between five and seven per cent in 2022. And that’s not including hybrids or plug-in hybrid sales, which have also been on the rise.
In the U.S., sales of EVs and plug-in hybrids could grow by anywhere from 50 to 100 per cent this year, estimated Chris Harto, senior transportation policy analyst at the consumer advocacy group Consumer Reports. Globally, sales of electric and plug-in hybrid passenger vehicles are projected to reach 10.5 million in 2022, nearly four million more than last year, and roughly 14 per cent of all vehicle sales, according to a recent report from research firm BloombergNEF.
“We’re really starting to transition into a more mainstream phase of the EV adoption curve,” Harto said. That’s because earlier EVs, with a few exceptions, were niche products: small hatchbacks or expensive luxury sedans.
SUVs and pickups represent more than 80 per cent of the new-vehicle market in Canada, but there have only been a handful of electric SUVs on sale and no mass-market electric pickups. In 2022, however, nearly every car company will have at least one electric SUV for sale.
Many forces, both new and old, are driving this seemingly sudden change, including technological advances, market competition, national and provincial or state sales mandates and more stringent vehicle-efficiency standards like those introduced late last year by the U.S. Environmental Protection Agency. And, consumer rebates offered by governments in jurisdictions around the world continue to make electric vehicles more affordable. In Canada, the federal government plans to spend an additional $1.5 billion on the iZEV incentive program, which takes up to $5,000 off the price of a new EV. U.S. President Joe Biden’s Build Back Better bill, if it passes, would reduce the price of certain EVs by US$12,500.
Increasingly though, consumer demand will drive EV uptake. Last year’s Ford Mustang Mach-E, for example, was a direct response to the popular Tesla Model 3. Even Ford CEO Jim Farley was surprised by the market’s appetite for his company’s new $51,000 EV. “It’s hard to produce Mustang Mach-Es fast enough to meet the incredible demand,” he tweeted in December, adding that Ford would increase production this year. Similarly, Ford is nearly doubling production of its first electric pickup, the F-150 Lightning, to 150,000 units annually to meet demand.
Recent surveys by Deloitte and Natural Resources Canada show the number of Canadians considering a plug-in hybrid or battery-electric vehicle is far greater than the current market share of those products.
Car companies are finally catching up to consumer demand, Harto said. “You have Tesla shattering that ‘consumers-won’t-buy-EVs’ myth … and automakers sitting there watching Tesla’s sales grow exponentially every year were realizing they couldn’t just sit on their hands.”
Jean Marc Leclerc, president and CEO of Honda Canada, acknowledged in an interview that the market for EVs is changing faster than the company originally envisioned. Honda won’t have a fully electric SUV on sale in Canada or the U.S. until 2024.
Although this year’s barrage of new mass-market EVs may seem sudden, it’s not; this is the result of big investments made years ago, said J.D. Power’s Robert Karwel.
Collectively, the auto industry has committed to spend more than half a trillion dollars on electric-vehicle development and production in this decade, according to a Reuters estimate. It’s a monumental shift unlike anything the industry has ever seen, and one that already has Canada’s auto manufacturing sector battling to retain jobs by winning fresh investments in new factories and retooling.
Consumers’ reaction to the first electric pickups will be a “canary in the coal mine moment” for EVs, said Karwel. “If you can get [pickups] to work as an electric, then I think you’ve really attacked the heart of the market,” he said.
Consumers have been burned before by exciting electric cars that failed to materialize, or – in the case of Tesla’s Cybertruck and Roadster – have been delayed. Consumers also have concerns about driving range, the availability of public chargers, and the higher upfront cost of EVs. These are significant barriers, but the new models coming and increased availability will speed up adoption.
Unfortunately that doesn’t mean it’ll be easy to buy one of the many new EVs coming out this year. Supply constraints and strong demand mean that, unless you’ve already placed an order, you may have to wait quite a while before taking delivery of that shiny new electric SUV.