As interest in electric vehicles ramps up across North America, what consumers buy in Canada and the United States can differ substantially, owing to different government incentives, fuel prices, charging infrastructure or even vehicle availability.
That has sometimes led to widely varying pictures of the EV market in both countries. While car sales in general have plummeted in 2020, EV sales in 2020 still make
s up a growing percentage of consumer vehicle sales around the world, according to EVvolumes.com, a database that tracks global electric vehicle sales figures.
To the end of May, their global market share is up slightly to 2.7 per cent, versus 2.5 per cent in 2019, and just under 2 per cent in the United States. Meanwhile, Canadian EV sales in the first quarter suggested a 3.8-per-cent share of the auto market, according to sales data from IHS Markit Catalyst.
Why care so much about a market that accounts for less than 4 per cent of Canadian new vehicle sales? Because it affects us all, the latest science suggests. Increasingly long-range EVs have health and societal benefits, concluded a study published in June by the Ontario Health Association and the Environmental Defence advocacy group.
It calculated that a total shift to zero-emissions passenger vehicles in the Greater Toronto and Hamilton Area would prevent 313 early deaths a year. Each EV that replaced a gas-powered car was estimated to bring $10,000 in social benefits – and these benefits did not include potential health-care cost savings, stated the authors.
Before COVID-19 put a huge dent in auto sales in North America, Canadian EV sales had increased 15 per cent in 2019, while decreasing by 10 per cent in the United States over the same period, according to a recent study.
Given that cars with internal combustion vehicles are still more profitable for most automakers, government rules pushing for cleaner or zero emissions vehicles have been key to encouraging EV adoption.
Government measures key
Over the past decade, various EV incentives have helped to launch and shape the emerging plug-in vehicle market.
In Canada, vehicle rebates started at the provincial level, with Ontario, British Columbia and Quebec all offering money to help offset the higher initial cost of EVs. Ontario’s rebate started at $8,500 in 2010, and eventually went up to $14,000 before its cancellation in July, 2018. Rebates in British Columbia and Quebec now range from $1,500 to $8,000.
Electric vehicle buyers in every province became eligible for government rebates in 2019, when the federal government began offering incentives of up to $5,000.
In 2010, the U.S. government began offering a tax credit of up to US$7,500 a year for buying an EV, while California offered a US$2,500 rebate that same year.
Fuel prices, buyer tastes
Given that provincial incentives are still offered in British Columbia and Quebec, which have some of the highest average fuel prices in Canada, it’s perhaps not surprising that a majority of plug-in electric vehicle sales are now concentrated in those two provinces. (In the United States, EV sales are generally concentrated on the coasts and California in particular, which has some of the highest fuel prices in the country.)
Steve Carter, director of marketing for Mitsubishi Motors Canada, credits a $7,000 rebate in Ontario for helping to push Canadian sales of its Outlander PHEV past the 5,000 mark in 2018.
With that generous incentive now gone, fuel economy is the most frequently cited reason for an Outlander PHEV purchase, Carter said. In 2020, Outlander PHEV sales have fallen by 23.7 per cent in the first quarter, versus a 22.6-per-cent drop of regular Outlander sales.
Nevertheless, the 619 Outlander PHEV units sold in Canada during that time account for 17 per cent of all Mitsubishi sales north of the border, while the 347 sold in the United States add up to just 1 per cent there, company officials confirmed.
“The U.S. and Canada are quite different markets,” said Cason Grover, director of product planning for Mitsubishi Motors North America.
He attributes the relative lack of interest in the States to the fact that the Outlander PHEV comes equipped with all-wheel drive, something that is not as popular “in the so-called ‘smile states’ across the bottom third of the U.S., where the weather is generally dry.”
Available EV chargers
Charger investment also helped British Columbia and Quebec become early EV adopters, though the extensive availability of chargers in California is generally accepted to be the best on the continent. This, along with a state-imposed zero-emissions vehicle mandate and California’s commitment to high-occupancy-vehicle lanes, helps to explain why the state generates roughly half of all EV sales in the United States.
Rob Barrosa, chief operating officer of the Electrify Canada network, a wholly owned subsidiary of Volkswagen Canada, lauded the early investment in charger networks in Quebec and British Columbia.
I think that’s why you see a lot of adoption in those provinces,” he said.
Ontario, though, has since become the launchpad for a few privately funded EV charging networks, including ones from Suncor at Petro-Canada stations, and the Electrify Canada network launched in fall 2019.
Electrify Canada plans to offer 32 quick-charge stations by the end of 2020, and just opened its first location in Merritt, B.C., in May, with plans to expand to Alberta and Quebec.
Barrosa, who is also operations director at Electrify America, says there are several factors that affect Canadian demand for EVs. These include price, with larger federal and manufacturer incentives available to American buyers; fuel prices; and worries over the range of electric vehicles, especially in the winter. He says range anxiety is abating, as newer technology and more charging stations allow for greater driving distances.
Among EV enthusiasts, the Tesla Supercharger network is acknowledged as the single most extensive charging network on both sides of the border, and has become a major reason for the California company’s sales success. The company sells roughly half of all new plug-in vehicles in North America.
Supply and demand
Yet there are also differences in which EVs are offered in each country. Kia Canada received first dibs on the redesigned 2020 Kia Soul EV, which has yet to reach the United States, owing to high demand in Europe and a shortage of EV components, the company confirmed.
Hyundai Canada officials say the plug-in Ioniq hatchback and Kona EV crossover are selling well in British Columbia and Quebec. Both provinces have a government mandate requiring an increasing percentage of vehicle sales in those provinces be zero- or partial-zero-emissions vehicles. Both models have also gained a strong foothold in Ontario, with demand consistently higher than supply.
That’s an issue for Canadian EV buyers, said Daniel Breton, president of Electric Mobility Canada, an umbrella group for organizations looking to increase various forms of electrified transportation.
“In Quebec and B.C., it’s tough to get EVs,” Breton said. “When you go to a dealer that says it’s going to be six to 12 months to deliver a car, people coming off a lease don’t want to wait.”
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