All hands on deck required in the transformation to electric mobility

The electric vehicle revolution is well underway with more than 120 electrified models expected in Canada this year. This is all part of an exciting transformation to electrification underway in the global automotive industry, with automakers ramping up production across North America. It includes massive investments to retool auto manufacturing facilities, new battery plants, and the creation of a critical mineral supply chain. These investments are already showing results with North American zero-emission vehicle (ZEV) production reaching seven per cent of total vehicle production in December 2022, up from 4.7 per cent in December 2021. Simply put, this is the largest reindustrialization of the automotive industry to take place over the past century. Canada has been a major beneficiary of this transformation with automakers announcing investments of more than $16-billion in just the past three years. The federal government’s proposed ZEV mandate designed to micromanage vehicle supply across Canada is a distraction from the real challenges that governments, utilities, non-governmental organizations, and industry need to be focused on: ensuring the supports are in place to help Canadians make the switch to electric. Mandating vehicle supply amid this transformation is like chasing horses that already left the barn. Rather than pursuing outdated and redundant regulations, Canada needs to address the well-documented barriers to electrification. Brian Kingston is president and CEO of the Canadian Vehicle Manufacturers’ Association. Photograph courtesy of Brian Kingston KPMG’s third annual consumer auto poll released in February found that of the 70 per cent of Canadians who intend to buy a new vehicle over the next decade, only 28 per cent prefer a battery electric or plug-in hybrid vehicle. Without higher demand levels, achieving the government’s 100 per cent ZEV sales target by 2035 simply won’t be possible. The culprits? A lack of robust charging infrastructure across Canada and the costs associated with going electric. Nearly 70 per cent of Canadians are concerned about the availability and reliability of public ZEV charging stations. Another 83 per cent of respondents said that Canada needs to adopt a ZEV charging uptime standard and regulatory framework for improved reliability. Charger reliability remains a serious challenge in Canada, with no national standards for charging stations unlike in the United States where President Joe Biden has made this a top priority. More than a quarter (26 per cent) of Canadians said the cost of a ZEV is preventing them from buying one with rising interest rates compounding the affordability challenge. Rising interest rates have put ZEVs out of the price range for 81 per cent of respondents. KPMG’s findings are consistent with Ernst and Young’s Electric Vehicle Readiness Index that found Canada has fallen from eighth place in 2021 to 13th in 2022 of the world’s top 14 vehicle markets. The main reasons for the poor performance are a lack of ambition on charging infrastructure and consumer incentives. The growing ZEV charging gap is out of step with the government’s ambition to reach 100 per cent ZEV sales by 2035. There are currently only 3,500 operational publicly funded EV charging ports of the 84,500 the government has committed to building. For comparison, California is targeting approximately the same number of ZEVs on the road by 2030 as Canada with double the amount of public charging infrastructure and triple the funding. When it comes to affordability, Canada’s suite of consumer financial incentives does not do enough to make ZEVs accessible for everyone. In fact, Canada falls outside the top 20 countries globally when it comes to helping consumers purchase ZEVs. This is attributable to weak and uneven purchase incentives across Canada and limited or no help for those wanting to install a home charger. The government’s own analysis confirms that regulating vehicle sales will have a disproportionate impact on low-income households due to higher costs of ZEVs and installing charging infrastructure. Rural and northern Canadians will face more difficulties than urban Canadians given a lack of public charging infrastructure and higher electricity prices. There is a better way. Instead of developing new and redundant ways to regulate what vehicles Canadians can buy, why not focus on providing the charging infrastructure and incentives Canadians need if they are to make the switch to electric. Brian Kingston is president and CEO of the Canadian Vehicle Manufacturers’ Association. The Hill Times