When it comes to weaning Canadians off fossil fuels, the future can’t come soon enough. Climate change is a growing menace, battering our coastlines with floods and setting our forests aflame, all while displacing communities and leading to unprecedented losses in the process.
According to the UN, fossil fuels contribute to 75% of global greenhouse gas emissions, including almost 90% of carbon dioxide emissions. One major driver of those emissions? Our everyday passenger vehicles, which, along with the general transportation industry, make up around 27% of Canada’s greenhouse gas emissions.
This all feeds into a growing urgency to decommission gas-powered cars and swap them with electric vehicles (EV) – a notion that seems all the more possible now than ever before, with most major automakers creating EV versions of their popular models, from heavy-duty electric SUVs to compacts.
However, despite the variety of EVs on the market, there are still major hurdles to getting electric cars on the road. According to a LowestRates.ca survey*, 88% of Ontarian respondents drive gas-powered vehicles. While 43% of respondents said they were considering an EV as their next car purchase, 75% cited the availability of charging stations, purchase and repair costs, and personal safety as main barriers holding them back from making the purchase.
When gas prices are high, so is interest in EVs
According to LowestRates.ca’s survey, 43% of survey respondents were considering buying an EV or hybrid vehicle for their next vehicle purchase, while 41% of respondents were not considering buying a green vehicle at all.
While more people may be considering EVs, actual interest in EV has been up and down these last few years. According to their year-end search data report, AutoTrader.ca found that interest in EVs actually declined by 12% in 2023 from the previous year. That may be because consumers are more motivated by their finances than anything else.
“We see a direct correlation between gas prices and EV interest,” says Jodi Lai, editor-in-chief of AutoTrader.ca. “So, when gas prices are high, EV interest is also high.”
She adds that in 2023, gas prices had scaled back down from peak highs, leading to a softening of EV-enthusiasm. Throw in the economic uncertainty and high interest rates of the last few years, and consumers may be hedging even further.
“A lot of [people] aren’t willing to pay that extra 15% to 20% that a new EV would command over a gas-powered vehicle,” adds Lai.
LowestRates.ca’s survey also found that 55% of people cited purchase cost as a concern when it comes to EVs.
Rebates help, and so do the lifetime savings
Currently, the most quoted electric or hybrid vehicle on LowestRates.ca is the 2023 Tesla Model Y Long Range, a midsized SUV with a range of 531 kilometres before requiring a charge. Pricing for this model starts at a manufacturer’s suggested retail price (MSRP) of $67,990.
Canada does offer a federal EV rebate of up to $5,000, which can be used in combination with provincial rebates, which vary by province. In Quebec, the rebate is $7,000, which allows new EV owners to knock up to $12,000 off the MSRP.
There are no provincially offered rebates in Ontario and Alberta.
But the savings only start at the rebate level. A driver of the Tesla Model Y Long Range would pay around $516 per year in charging costs – substantially lower than comparable gas-powered SUVs, like the RAV4, which can cost $2,125 a year in fuel.
“Even though EVs are more expensive up front, I think the cost of ownership over a long period of time will be better in that sense because they're saving on not needing to get oil changes,” says Lai.
However, Tesla's are a unique case. They require specialized maintenance from authorized autobody shops, which can up the cost of repairs. However, they also grant owners access to their robust supercharging network, which is a major advantage – especially for people who are concerned about charging.
Cost to insure the most popular EVs on LowestRates.ca
Tesla EVs are the bestselling EVs in North America, and Canada is no exception – in fact, the top five most queried EVs on LowestRates.ca last year were all Tesla's, with Model Y coming way ahead of the competition. Here’s how much it costs to insure these popular Tesla models.
Average annual insurance premium
|2023 Tesla Model Y 75D Long-range AWD
|2023 Tesla Model 3 Standard Range Plus 50
|2023 Tesla Model 3 75D Long Range AWD
|2023 Tesla Model Y 60D 2WD
|2022 Tesla Model Y 75D Long Range AWD
Read more: How are electric vehicles insured?
The challenge of charging stations
Another major concern cited by survey respondents was the number of charging stations available, and the cost of installing one at home. In the survey, 49% of respondents were worried about the availability of charging stations and 40% were worried about having to install one at home.
“Right now, EVs aren’t the best solution for every single Canadian out there,” says Lai. She points herself as one example: She lives in a building that doesn’t offer charging. “The current state of the public charging infrastructure, in my experience, has been very lacking so far.”
However, some believe that the general concern over lack of chargers may be overblown.
Currently, there are approximately 25,000 charging stations across Canada (this includes Tesla’s 1,490 DC fast-chargers and 2,100 Level 2 chargers).
“But people think that there’s like 5,000 to 10,000,” says Daniel Breton, the founder and CEO of Electric Mobility Canada. “Some people keep repeating that ‘There’s not enough, there’s not enough, there’s not enough,’ and so they get this idea that there’s not enough.”
And, he adds, people who don’t have reliable access to chargers — say, condo-dwellers or those who drive long distances to get to the nearest town — can opt for plug-in hybrid electric vehicles (PHEV), which offer the option to fuel up when needed.
Will EV regulations come to the rescue?
So, we know that price is one deterrent. The lack (whether perceived, or actual) of reliable charging infrastructure is another.
But actually getting drivers to take the pedal off the gas may take a regulatory framework more than anything else.
In late December, Steven Guilbeault, the Minister of the Environment in Canada, announced a new Electric Vehicle Availability Standard, which aims to achieve 100% EV sales (which include battery electric vehicles and plug-in hybrid electric vehicles) in Canada by 2035.
In addition to bolstering the charging infrastructure access across Canada and investing in vehicle manufacturing in the country, the feds will also target more sales availability in Canada.
This is a glaringly missing piece of our current market, where only two provinces, B.C and Quebec, have Zero-Emissions Vehicle (ZEV) mandates, which require automakers to deliver specific targets of EV sales and leases to those provinces. In fact, these two provinces have each exceeded their EV sales targets.
Without a regulated mandate, automakers aren’t obligated to send EVs to the rest of Canada, says Breton.
“Car manufacturers, for the past 75 years — whether it was for seat belts or antipollution system, or airbags – they always complain, but they always comply,” says Breton. “If there are regulations, they will send the vehicles first and foremost to the regulated jurisdictions.”
Mandates help locally manufactured cars stay in Canada
Boosting the availability of cars means shorter wait times for models like the Hyundai Ioniq5 and Toyota models, which have waitlists stretching over a year for Canadians. It also means that cars and parts that are manufactured in Canada — like the popular Toyota Rav4 — can stay in Canada.
“In 2011, the Canadian and Ontario government both provided $70 million to build the Toyota Rav4 EV in Ontario, and back then there was an $8,400 rebate if you wanted to buy an EV in Ontario,” says Breton.
However, because there were no regulations incentivizing EV sales in Canada at the time – unlike in states like California – all those locally manufactured vehicles were shipped south of the border.
“You could not buy one in Canada,” says Breton. “So, our point is that we’re investing billions of dollars in electric vehicle batteries and EV components in cars, it would be a shame if most, if not all, of those EVs were only sent to those regulated states or the two provinces in Canada that have regulations right now.”
More recently, GM Canada opened their first EV manufacturing facility in Ingersoll, Ontario. Overall, automakers and battery suppliers have invested $16 billion to producing new EVs, batteries and other materials within the province.
The Electric Vehicle Availability Standard could be the clincher to making sure that the cars that get built here, stay here.
Having locally manufactured cars, batteries and other components may also reduce the price of EVs on the market.
“There have been billions of dollars invested in the Canadian auto sector for switching over factories that made gas powered cars into factories that are making EVs and batteries,” says Jodi Lai. “Anytime we can avoid shipping costs will help bring down those prices for us.”
It’s zero hour for ZEVs
Right now, as Lai said, EVs don’t make sense for everybody. People who live in condos without chargers, people who are worried about battery performance in sub-zero temperatures, and residents of provinces without generous ZEV rebates may find it challenging to cut the gas entirely.
But this could change very quickly. The current charging network is already more robust than people think, with more stations on the way. All Canadians can currently get a rebate to reduce the cost of an EV, and most can round out their purchases with additional provincial rebates. Moreover, EVs and PHEVs can save drivers money at the tank and on yearly maintenance, all while getting them where they need to go – with increasingly longer ranges, to boot.
As Canada gets moving on its federal ZEV mandate, the EV revolution could already be underway.
*Survey conducted by LowestRates.ca, polling 816 Ontario drivers between January 12 and 15 who used LowestRates.ca’s auto quoter.
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