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Canada has ambitious goals to increase the number of zero-emission vehicles on our roads, but matching China may require supercharging current initiatives

The plug-in hybrid Toyota RAV4 Prime, like the one purchased by Blake Ford and Lisa Kadane.Jeremy Sinek/The Globe and Mail

Blake Ford and Lisa Kadane took delivery of their RAV4 Prime plug-in hybrid (PHEV) in January after having their name and a cash deposit on a waiting list for a full year.

“We got the first one in Kelowna,” said Kadane, a travel writer with two kids. “It’s super-cool. Since January, I think we’ve filled it up twice.”

While more expensive than a traditional internal combustion engine (ICE) vehicle ($53,000, including tax, after a $6,500 rebate), the Toyota PHEV fits with the family’s goal of being environmentally responsible and saving money in the long run.

But the couple’s experience with the limited supply and high purchase price shows why the federal government’s ambition to sell as many zero-emissions vehicles (ZEVs) per capita as China – the world’s largest EV market – are going to be very tough to achieve.

In Canada, just 1.5 per cent of vehicles – one in 66 – in this country are powered by electricity. The federal government would like to see more than six times as many ZEVs on the road within four years (10 per cent by 2025), 30 per cent by 2030 and 100 per cent by 2040. Yet we have a lot of catching up to do to match countries like China, says Daniel Breton, CEO of Electric Mobility Canada (EMC), a not-for-profit organization promoting the advancement of e-mobility.

In China, EVs are virtually exploding in popularity. By 2019, the most recent year for full statistics, 4.9 per cent of light-duty vehicles on the road in China were battery-electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs), according to Hamburg-based market research firm Statista. That’s more than three times Canada’s adoption rate on a per-capita basis.

Absolute numbers put the gap into even sharper relief: By 2019, China had 2.6 million BEVs and 768,000 PHEVs; Canada, meanwhile, had registered just 168,000 EVs by August, 2020. EVs sales are expected to grow by another 50 per cent in China this year, according to analysts at Canalys, a technology research company with offices in Portland.

“We are very much more behind,” Breton said.

Analysts and EV advocates say it’s not that China’s drivers are greener than Canadians. Rather, a complex interplay of geography, demographics and government carrots are behind China’s accelerating shift to electric vehicles.

The affordable Hong Guang Mini EV, nicknamed the Wuling, is helping power China's EV revolution.oldface.chen/Courtesy of manufacturer

At the top of the list is affordability. Chinese consumers have access to what is still a distant dream in Canada: a dirt-cheap electric vehicle.

The Hong Guang Mini, for example, sells for the equivalent of $5,600. The product of a joint venture between SAIC Motor (China’s top automaker), Liuzhou Wuling Motors Co. Ltd. and U.S.-based General Motors Co., it is now the best-selling EV in China, outpacing Tesla by 2 to 1 in January. Nicknamed the Wuling, this no-frills four-ish passenger vehicle with a cramped back seat is so basic it is a fitting heir to the Volkswagen Beetle’s “people’s car” label, although the Chinese prefer to call it the “people’s commuting tool.”

In Canada, the low-price EV leader is the Chevy Bolt, which recently saw a price drop to $38,198, plus dealer prep and delivery – still nearly seven times the cost of a Wuling. The Nissan Leaf and Hyundai Kona EVs both sell in the mid-$40,000 range in Canada, and Tesla’s least-expensive electric car, the Model 3, sells for about $52,990.

The Wuling is a “low-speed, rudimentary” vehicle, said Sam Fiorani, vice-president of global vehicle forecasting at Pennsylvania-based AutoForecast Solutions. Yet its 100 km/h top speed and limited range is enough for commuting in China’s cities, where 60 per cent of the country’s 1.4 billion people live, and its price puts it within reach of aspirational young urbanites.

“People save a very long time just to get a car,” Fiorani said.

The Wuling is designed for commuters who live in China's urban centres.Courtesy of manufacturer

Keep in mind the Wuling couldn’t cut it in North America, Breton said. The current model “would never pass a crash test in Canada” and has neither the speed nor range for sustained highway driving.

“These are different markets with different needs and wants for their customers,” said Breton, who notes that many Canadians still choose to drive trucks and SUVs. “People want to buy bigger cars here.”

Yet price is just one of many factors that make EVs attractive in China. That country jump-started electrified transportation by building a battery-powered public transit network. Where Canada has fewer than 100 electric buses, China has more than 500,000, Breton said.

National and local governments in China, eager to turbocharge the automotive industry, have also sweetened the pot for consumers by providing both financial incentives and cutting the red tape typical of car ownership there. New Wulings, for example, come with a licence plate, which normally takes months, if not years, to acquire in China.

As a result, the growth of Wuling and other China-based BEVs and PHEVs – such as the Baojun E-Series from SGMW and the Ora R1 from Great Wall Motors – has propelled the country like a slingshot to the front of the pack in global electric-vehicle ownership.

Twenty-two provinces and cities in China are offering motivators such as cash incentives for new purchases, raising licence plate quotas and scrapping subsidies for older vehicles, according to the U.S. firm IHS Markit. The city of Changsha, for example, offers a subsidy of up to 3,000 Chinese yuan ($582) on purchases of vehicles produced by a local manufacturer.

Beyond direct subsidies, government efforts have focused on building infrastructure that eases EV ownership. Chinese Premier Li Keqiang told the National People’s Congress in Beijing in March that the national government will add parking spaces, EV charging stations and battery-swapping facilities to the country’s cities to encourage EV adoption.

The push for EVs in China is part of that country’s overall economic strategy. EV sales are seen as a critical economic driver, according to a September 2020 report released by Safe, an American energy-security advocacy group. It states that out of 142 lithium-ion battery megafactories in operation or under construction around the world, 107 are in China, nine in the United States and none in Canada. Of the US$300-billion that global companies will invest in EV development and production over 10 years, nearly half will occur in China.

“The whole world is trying to corner the EV market,” said Fiorani. “They [Chinese automakers] want to be the source for global EVs.”

Breton notes that China has invested in mining the minerals and metals required for battery-making. Research conducted for an upcoming report from EMC shows China is No. 1 in the world for graphite production and rare-earth oxides, and No. 2 for lithium.

“This has economic and geopolitical implications,” Breton said. “Now people are starting to wake up to that fact.”

Canada’s EV ambitions are more modest. The Automotive Parts Manufacturers Association (APMA) has produced its Project Arrow BEV concept car, to be made entirely from Canadian-sourced parts. Ford Motor Co. of Canada has announced it will build five electric vehicle models at its Oakville, Ont., assembly plant, starting in 2024. General Motors is pouring $1-billion into the Cami plant in Ingersoll, Ont., to create Canada’s first large-scale plant for electric delivery vehicles, with production starting late this year. And Stellantis NV (the global automaker formed in January from the merger of Fiat Chrysler Automobiles and Peugeot owner PSA Group) has promised to build either a plug-in hybrid or a full EV in Windsor, Ont., by 2024. Advocates have also urged the construction of a battery megafactory.

Project Arrow is an electric concept car sourced entirely from Canadian-made parts.APMA/Courtesy of manufacturer

Yet producing EVs alone does not guarantee they will be sold in Canada, Breton said. He noted that Toyota partnered with Tesla to build an EV version of RAV4 SUV in Woodstock, Ont., beginning in 2012. Every one of them, he said, went to California.

For Breton, boosting EV uptake in Canada requires two key government actions: a ZEV mandate (a regulatory requirement for manufacturers to meet EV sales quotas) and generous cash incentives until the price of EVs reaches par with internal-combustion-engine vehicles, which is expected in three to four years. Without ZEV mandates, Breton said, it is hard to even find a new EV for sale. A survey of more than 1,000 dealerships conducted by Transport Canada and Dunsky Energy Consulting in February, 2020, found that two-thirds of Canadian dealerships did not have a single EV available for purchase.

The provinces that have offered incentives have seen the biggest EV uptake. Breton said 92.7 per cent of Canada’s EV fleet is in Quebec, British Columbia and Ontario. Quebec offers a rebate of $8,000 on a full EV priced at $60,000 or less. British Columbia offers $3,000 back on a full EV and a $1,500 rebate on PHEVs. Ontario offered rebates from $5,000 to $14,000 until July, 2018.

EV advocates say withdrawing incentives kills EV sales. When the Ontario government ended that province’s rebates, sales of electric and hybrid vehicles dropped by half in one year, EMC reported.

Two other jurisdictions have recently introduced rebates: Nova Scotia ($3,000 for new vehicles, $2,000 for used EVs and a $500 rebate for e-bikes) and the Yukon ($5,000 on new EVs).

The presence of handy available recharging stations also boosts EV use, Breton said. Quebec’s Gaspé tourism region began building a network of fast-charging stations in 2016 and saw a spike in tourists driving EVs there, Breton said. Across Canada, fast-charging stations grew by 22 per cent between March, 2020 and March, 2021, Electric Autonomy reports. Breton said the network is well built on main highways and in cities but needs to grow in rural areas.

Breton is anxious to see all levels of government work more collaboratively on ZEV strategies.

“It’s a matter of national interest, for geopolitical reasons, for economic reasons and for environmental reasons,” he said.

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