The transition from gas to zero-emission vehicles has hit some speed bumps lately. Only three years ago, automakers and governments alike pledged significant capital investment into retooling manufacturing sites, upskilling auto workers and securing supply chains, to support the gradual replacement of conventional cars with battery-run vehicles.

To safeguard Canada’s nascent electric vehicle industry, the federal government imposed a 100% tariff on Chinese EVs in October 2024, matching the 100% tariffs under U.S. president Joe Biden that took effect a month earlier.

President Trump’s arrival at the White House has since upended the economic landscape. The Trump administration has launched a trade war on Canada that includes a 25% tariff on automobiles, light trucks and auto parts that fail to meet the regulatory requirements under the trade agreement between Canada, the United States and Mexico (CUSMA).

The U.S. import taxes coincide with Canadian federal requirements to produce more electric vehicles. Former prime minister Justin Trudeau oversaw the adoption of new rules that required that 20% of total passenger car sales be electric by 2026. Between the import tariffs and the looming deadline to supply more EVs, legacy automakers such as General Motors, Ford and Stellantis pushed back, arguing that the federal mandate is simply not feasible.

“With EV sales falling for five months in a row . . . there is no pathway to meeting the government mandated target,” Brian Kingston, president and chief executive of the Canadian Vehicle Manufacturers’ Association, argued in The Globe and Mail, adding that “Canadians are clearly not ready for widespread EV adoption.”

Responding to industry pressure, Prime Minister Mark Carney suspended the 2026 EV sales target, saying that automakers have “got enough on their plate.”

The carmakers want the free market when it suits them, but they don’t want the free market when it doesn’t suit them.

– Daniel Breton, CEO, Electric Mobility Canada,

Indeed, new registrations for battery-electric vehicles dropped by 39.2% in the second quarter of 2025, according to Statistics Canada. But Joanna Kyriazis with Clean Energy Canada takes issue with the cause of plummeting sales – which, she notes, is occurring only in Canada as EV purchases continue to climb upward in much of the rest of the world.

“Our polling from this year shows that 45% of Canadians still lean towards an electric vehicle for their next purchase,” Kyriazis counters, adding that the percentage rises to 69% in metro Vancouver. “The interest is there, but upfront cost remains a top barrier. The pause in provincial and federal buyer incentives means buyers are waiting on the sidelines to see if those programs are coming back.”

Despite the recent spate of automakers announcing delays and cancellations of EV rollouts, the tariff on Chinese-made EVs remains in place. The situation has turned into a political tug-of-war: OEMs (original equipment manufacturers) as well as Ontario Premier Doug Ford say that the tariff barrier is still needed. Others, such as Daniel Breton, president and CEO of Electric Mobility Canada, disagree. “We’ve been against the 100% tariff from the get-go. [Canada] imposed the tariff to play nice with the U.S. But here we are a year later and playing nice hasn’t given us any advantages.”

The TD report makes the case that blocking electric cars made outside of North America from the Canadian market may not, in fact, be in anyone’s interests.

The tariff wars

Globally, sales of battery-electric cars are surging. Brazil, which has been open to Chinese imports, has seen EV sales soar more than 500% between 2022 and 2024, and Chinese automaker BYD has established a significant presence in the Brazilian market.

Bloomberg reports that Brazil plans to reintroduce import taxes at rates ranging from 10% to 35% by June 2026 to encourage domestic investment. Subsequently, Chinese carmakers BYD, GAC and Great Wall Motor are all setting up local manufacturing plants with the promise of job creation and economic growth.

For its decision to block Chinese entrants, Canada has been hit with a 76% tariff on Canadian canola seed imports and a 100% tariff on canola oil, meal and peas. China also put a 25% tariff on certain Canadian pork, fish and seafood products.

Kyriazis points out that Canadians bear the cost in other ways as the two countries ratchet up import taxes. “We are walling off our car market so that it’s no longer competitive. Canada has an EV affordability problem. We found 20 EV models available today in the EU market for less than $40,000 Canadian, only one of which can be bought here.”

Kyriazis is not alone in this observation. Writing for The Conversation, Addisu Lashitew of McMaster University says that a freer trade regime with China would substantially broaden the range of affordable EVs available to Canadians, “who are currently limited to U.S. brands averaging more than US$55,000. By contrast, Chinese manufacturers offer numerous models priced near US$25,000, a factor that would likely spur a substantial increase in EV adoption.”

Building bridges instead of barriers

“This 100% tariff was meant to buy our domestic auto sector time to ramp up and get more competitive. Instead, we’ve seen many EV-related investments and production plans being delayed or cancelled. We’ve seen carmakers backtrack on their EV-related goals,” Kyriazis says.

According to the TD assessment, blocking entrance of EVs from China has curtailed domestic adoption of the most advanced battery technology on the market, noting that Chinese OEMs are miles ahead of everyone else in offering affordable vehicles that, in some cases, are cheaper than comparable models running on internal combustion engines.

Thanks to China’s formidable head start in EV production, Chinese auto manufacturers like BYD, SAIC and Geely produced 70% of the electric cars sold globally in 2024, according to the International Energy Agency. Automakers in the United States produced just 5%. The more electric vehicles that Chinese companies make, TD economists argue, the more difficult it will be for carmakers in North America to catch up.

Moreover, Canada’s protectionist policies may be encouraging a sense of complacency – or worse. “In 2019, the International Energy Agency published a report that placed Canada dead last in the world for fuel efficiency of its light-duty vehicle fleet and GHG emissions per kilometre driven,” Breton says. “This means that we’re driving gas guzzlers as a country. So when I hear that some carmakers want us to keep driving gas guzzlers by aligning with the U.S., to me this is completely stunning.”

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Given the gap in EV technology and heightened risk of falling too far behind, the TD report recommends that partnerships between Canadian and Chinese car companies could be formed so that Canada can improve its EV ecosystem. Simultaneously, joint ventures with Chinese automakers would likely help Canada return its EV adoption rate to an upward trajectory by overcoming cost concerns and range anxiety.

Canadians appear to support the prospect of opening the market to Chinese entrants. In a recent Nanos Research survey with CTV News, 62% of respondents said they either support or somewhat support removing the 100% tax on Chinese-made EVs.

Says Breton, “The carmakers want the free market when it suits them, but they don’t want the free market when it doesn’t suit them. And to me, the China conversation is about that as well.”

Victoria Foote is a writer and editor who specializes in clean energy and climate.

The post Economists say Ottawa should rethink tariffs on Chinese EVs appeared first on Corporate Knights.

Sharifi says that she was not the only tenant in her building, located in Toronto’s east end, to make such a request. Other EV owners submitted similar pleas and all were told that the board had other priorities.

They are far from alone in their frustration at the lack of accessible, on-site chargers for people living in multi-unit residential buildings (MURBs). Insufficient on-site charging in MURBs has become a significant gap in the EV ecosystem. Currently, 72% of EV charging in Canada occurs at home. Workplace and public charging stations make up the balance.

But as more Canadians replace their gas car with an electric one – 65,733 new zero-emission vehicles were registered as of the second quarter of 2024, an increase of 37.9% from the same period last year – the clamour for chargers located in apartment and condo parking stalls will only get louder.

Louise Lévesque, senior policy director with Electric Mobility Canada (EMC), says that the anticipated rise in requests for on-site charging facilities has now arrived. “We’re there, and we need to address this,” Lévesque says, although she acknowledges a recent uptick in charging infrastructure installation in the condominium sector, which she attributes to tenant advocacy.

It’s unequal. If you’re living in an apartment building, you can’t benefit from the economics of driving an EV just because you can’t install a charging station.

– Louise Lévesque, senior policy director with Electric Mobility Canada

Even so, Lévesque says, efforts to make residential buildings “EV-ready” – equipped to handle a higher electrical load and with circuitry in place to hook up to chargers – are not moving fast enough. EMC submitted recommendations to the federal government two years ago advising that one million MURBs be EV-ready within the next five years. Canada will not come close to reaching that target.

Access to EV charging is an equity issue

As many as one in three Canadians lives in a condo or apartment rental; in urban centres, the share is much higher, reaching 60% in the Montreal and Vancouver metropolitan areas. Americans are in a comparable position: nearly a quarter of all housing structures in the United States have more than one dwelling unit.

Noting that in the United States some 50% to 80% of all battery-electric car-charging sessions take place at home, Eleftheria Kontou, an engineering professor at the University of Illinois, argues that “the current limited access to home charging in many cities constrains electric vehicle adoption, slows down the decarbonization of U.S. transportation and exacerbates inequities in electric vehicle ownership.”

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According to a report by Dunsky Energy + Climate Advisors, EV uptake is concentrated among more affluent people. Access to charging in multifamily buildings is an equity issue, the report’s authors write, given the greater prevalence of low-income and racialized people in multifamily buildings relative to single-family homes.

Lévesque echoes that finding, adding that EV adoption rates will continue to track upward over the next few years but that the buyers will be predominantly homeowners. “I think that’s sad,” she says. “It’s unequal. If you’re living in an apartment building, you can’t benefit from the economics of driving an EV just because you can’t install a charging station.”

Lévesque says that municipalities and the charging industry are getting creative in response to residents’ need for easy access to chargers, such as locating charging hubs in parking lots close to high-rise clusters.

Better days ahead for EV charging infrastructure

Property owners and condo boards often cite cost and electrical systems that can’t handle the additional load from EVs as the biggest obstacles to investing in charging equipment. Power sharing, where multiple cars can share a single circuit, can help ease the energy burden, Lévesque says. Government subsidies are also available to retrofit buildings so that they are EV-ready, although provincial support is wildly inconsistent from one jurisdiction to the next.

Still, progress is evident in places such as the City of Vancouver, which raised the percentage of EV-ready parking stalls required in new MURBs from 20% to 100% in 2018. Three years later, Vancouver launched an incentive program to accelerate EV-ready retrofits in existing rental buildings.

The City of Toronto requires that 100% of residential parking in new construction and 20% to 50% of non-residential parking be EV-ready.

As for recalcitrant condo boards, a new movement is underway called “the right to charge.” If adopted as legislation, the right to charge means that boards and property owners can be compelled to make their buildings EV-ready. For example, in the State of Illinois, the new Electric Vehicle Charging Act requires that 100% of parking spaces at multi-unit dwellings be ready for EV charging, with a conduit and reserved power capacity to easily install charging stations. The new law also gives renters and condo owners in new buildings a right to install chargers without unreasonable restriction from landlords and homeowner associations.

According to the Dunsky report, installing charging infrastructure adds an increasingly sought-after amenity that can make a building more valuable. Lévesque agrees: “If you’re selling your condo and you can tell a future buyer that your parking spot is EV-ready or has a charging station, that adds value,” she says. “More and more people will be interested in not having the hassle of getting all that installed and going through the whole process of getting approvals – it’s all done already.”

Sharifi no longer needs to charge her EV at the shopping mall closest to her condo: she installed a charger when she moved into her townhouse last August. And despite the board’s refusal to budge on the issue, Sharifi does not suffer buyer’s remorse. “I save thousands of dollars a year on gas,” she reports. “In all this time, I’ve never had an oil change or needed maintenance work.” 

Sharifi also believes that the board will eventually come around. “There are a lot of new buildings going up in that neighbourhood. All of them offer an EV-ready parking stall. They’re going to have to do this.”

Victoria Foote is a writer and editor who specializes in clean energy and climate.

The post Lack of charging stations in high-rise buildings is cutting off access to EVs appeared first on Corporate Knights.

That helps explain why the industry is still on a trajectory that will overshoot the Intergovernmental Panel on Climate Change pathway to limit warming to 1.5°C by a wide margin – at least 75% by the year 2050, according to a study by global management consulting firm Kearney. The bright side is that EV sales are surging across North America. In fact, the Tesla Model Y was the sixth-bestselling vehicle in the U.S. in 2022, breaking the brand into the annual top-10 sales list for the first time. This happened despite ongoing supply shortages that continue to impose low inventory and long wait times of up to 24 months for EVs of all types, but particularly for trendy vehicles like the Ioniq 5. The electric SUV with a funky 1980s-inspired aesthetic has been raking in awards and accolades. But can it lure SUV drivers away from gas-powered models?

While EV manufacturers like Ford and Tesla have been dropping their prices in the U.S. and the Inflation Reduction Act offers new incentives for EV buyers, more than half of American consumers think they’re still too expensive, according to new research from Deloitte. The takeaways? Now is the time to push hard on educating consumers about the benefits of EV ownership, while the iron is hot and climate change targets aren’t yet astronomically out of reach.

The EV cost-of-ownership analysis at left is one such educational tool. For Corporate Knights’ fifth EV faceoff, we’re pitting one of the industry’s most awarded EVs, the Ioniq 5 SUV from Hyundai, against the world’s bestselling gas-guzzling SUV, the Toyota RAV4. Here’s how much each of these vehicles costs to own over a 10-year period and how an EV can save money over the long term in ways drivers may not yet have considered.

Canadian analysis

The Ioniq 5 is the second most popular EV in Canada after the Tesla Model 3, and it was named 2023 Canadian Utility Vehicle of the Year and Best EV in Canada for 2023 by the Automobile Journalists Association of Canada.
For this analysis, we chose the Ioniq 5 Preferred AWD Long Range trim. Although this is the most expensive model, it has the longer-range battery and all-wheel drive, which are important purchase factors for many Canadian buyers. We skipped the $6,000 Ultimate package, which adds on driver assistance and other technologies, since most essential features are already included in the base purchase price of $57,652, including destination charges of $1,925 and other fees.

To find equivalent features and as a nod to the current trend toward SUVs with added outdoor-focused design elements and features, we’ve priced the Ioniq 5 against the Toyota RAV4 Trail AWD, which carries a price of $43,334, including delivery charges of $1,930 plus other fees.

Notably, these figures are based on prices in Ontario, where there are no provincial rebates available and electricity rates are less favourable, at an off-peak time-of-use rate of 7.4 cents per kilowatt-hour. Even with these factors working against it, our calculations show it’s less expensive to own the Ioniq 5 over 10 years than the RAV4 by $6,726.75.

The Ioniq 5 gains an edge via the RAV4’s fuel costs and a more favourable interest rate: Hyundai is quoting a 72-month financing annual percentage rate (APR) of 5.99% as of late February 2023 for the Ioniq 5, while Toyota is quoting 7.09%. Every RAV4 built will sell, so Toyota has little incentive to offer cut-rate financing. The result is a cost that consumers may not expect up-front.

Note that the Ioniq 5’s cost savings would be even higher in Quebec and British Columbia, where provincial purchase incentives of $7,000 and $4,000, respectively, would apply. In any case, the most challenging part of the decision-making process here is whether to settle in for a long wait for delivery.

U.S. analysis

The Ioniq 5 is just as celebrated in the United States, where MotorTrend has named it SUV of the Year. For our U.S. analysis, we’ve based our calculations on prices in Washington, D.C. We’ve selected the Ioniq 5 SE, which is the most affordable trim that comes with a long-range battery, and we’ve chosen rear-wheel drive. With $1,335 in delivery charges included, the price to buy a new Ioniq 5 SE comes to $42,785 (all prices in U.S. dollars).

For the RAV4, we’ve worked with the XLE Premium trim with front-wheel drive, which is relatively affordable at $33,710 (including $1,335 in delivery charges) and roughly equivalent to the Ioniq 5 SE in included equipment.

A significant change was made to the federal tax rebate program through the Inflation Reduction Act that came into effect on January 1, which has made vehicles built outside of North America ineligible for U.S. EV tax credits.

Ioniq 5 units sold in the U.S. are currently built in South Korea, meaning it no longer qualifies. Hyundai is building a production facility in Georgia, but it will be several years before this comes online.

Even with the lack of rebates, the Ioniq 5 comes out ahead of the RAV4 in cost of ownership over 10 years. This is again thanks to a lower financing APR (4.9% for 72 months for the Ioniq 5 versus 5.49% for the RAV4), plus Hyundai offers an extra year of included scheduled maintenance versus Toyota, which allows us to calculate an even lower upkeep cost. Most importantly, the District of Columbia has a program that gives EV owners access to an off-peak electricity rate of 4.9 cents per kilowatt-hour, which goes a long way in reducing charging costs. Charger installation costs also qualify for a district tax credit of 50% to a maximum of $1,000; we have not included the credit in these calculations as the amount would vary significantly based on actual purchase and installation cost, but the tax credit would equate to an additional few hundred dollars in savings for most owners.

Unfortunately, many U.S. dealers are charging significant markups for the Ioniq 5 because of high demand, and if you relent and pay more than the sticker price, you’ll lose these gains. But if you can find a scrupulous dealer with access to inventory, our calculations show you’ll save $2,892.74 on the Ioniq 5 over the RAV4 over 10 years. And since you’ll also spend that decade driving a vehicle that’s not guzzling gas and spewing fumes, in this scenario the Ioniq 5 is a win-win proposition.

Stephanie Wallcraft is an award-winning automotive journalist based in Toronto and is a past president of the Automobile Journalists Association of Canada.

Read more EV Faceoffs to find out how electric vehicles compare to their gas-powered counterparts.

The post EV Faceoff: Does the trendy Ioniq 5 cost less to own than the world’s top-selling gas-powered SUV? appeared first on Corporate Knights.

In the 1960s, a scientist named Ruth Reck working at General Motors found in her research that emissions from car tailpipes were causing global heating and would result in dire consequences for the planet. Reck presented her findings on climate change to three top executives at GM’s corporate headquarters, two of whom would later become CEO. 

They ignored her. 

Even after knowing the threat of climate change, they refused to alter their business plans or lobbying strategies – because it could affect their bottom lines. Decades later, it seems that car corporations haven’t changed much. The one difference now is they like to pretend they care about the climate.

Listening to car industry lobbyists these days, you’d think you were listening to electric vehicle evangelists. They’ll say the real reason Canada is lagging behind other countries in EV adoption is a demand deficiency caused by the lack of consumer education, purchase incentives and charging infrastructure.

Please ignore the man behind the curtain. 

If Canada had a lack of consumer demand for EVs, we wouldn’t see buyer waiting lists that are up to three years long. Despite 83% of consumers willing to test drive an EV and 51% willing to buy one, most dealerships (55%) don’t have a single EV in stock. Increasing purchase incentives in this low-supply environment – a demand subsidy – would simply grow these wait lists and potentially inflate prices. 

While the availability of charging is a real problem – and we should be doing more to build out a robust network – it’s wrong to suggest that it’s the primary barrier holding back EV adoption. Studies have shown that boosting public charging to even universally available levels – making charging as convenient as gassing up – would move the dial for EV new market share by only 1.5%. It’s an important part of the policy solution but not an actual replacement for stronger policies – as car companies like to suggest. 

There’s a problem with lack of consumer education on the benefits of EVs? Don’t tell that to the advertising departments of major car companies. Nearly 80% of all car ads are for gas-guzzling SUVs and trucks, which are approximately 20% less fuel efficient than regular cars. Car companies are the second-largest investor in digital advertising in Canada, just behind retail – spending $1.6 billion in 2019. This advertising power is part of the story of why these fuel-inefficient vehicles have risen from half of new car sales to eight out of every 10 new car sales over the last decade. This trend explains why Canada has the most polluting vehicle fleet in the world.

What’s really going on here?

While car companies like to brag about how many new EV models they’re bringing to market, they produce very low volumes of them. That’s because EVs have smaller margins compared to gas guzzlers – so they make less money selling them. Car companies will be able to make a significant amount of money on EVs only if they scale production, achieve lower production costs from “economies of scale” and can offer more competitive prices. But that will cost billions of dollars. 

Why do that, when you can just keep making more money from existing investments in manufacturing gas guzzlers? They’re in the business of making money – and the money is good. North America’s “big three” automakers – Ford, Stellantis and GM – collectively made $41.5 billion (Canadian) in operating profits last year. 

Automakers are trying to fight against the federal government’s plan to bring in regulations that will enforce Canada’s EV sales targets, and effectively ban the sale of gasoline-powered cars by 2035, because they stand to lose money that they’d otherwise make profiting from the pollution. In order to meet sales targets, they’d be forced to reinvest the profits they make from these gas guzzlers into expanding EV production and offer clean cars at more affordable prices.

Which is why they’re spending so much time and effort trying to deflect blame onto Canadian consumers. The auto industry would like us all to think that Canada’s slow EV adoption rate is your fault, rather than how they make, market and price their cars. 

Let’s not fall for it. 

The post Despite what auto industry says, consumers aren’t to blame for poor EV sales appeared first on Corporate Knights.

In late June, the environment ministers of the 27 European states agreed to reduce the allowable CO2 emissions of new vehicles in 2035 to zero – putting an end to engines running on gasoline, diesel or natural gas. Effectively, the new standard will be electric vehicles – with the EU deferring until 2026 a decision on whether to phase out combustion/electric hybrids by 2035.

The agreement quashed a request for more time by some automakers, which revealed a growing split in the automobile and broader mobility sectors. In mid-May, Volvo and Ford Europe joined a broad coalition of companies, including  Zurich Insurance Group, in urging the EU to take action. “Policies put in place in the next few years will decide whether the world has a fighting chance to curb climate change,” said the letter signed by 28 companies. “To enable all cars and vans on the road to reach zero emissions by 2050, the last car with any combustion engine, including hybrids, should be sold no later than 2035.” 

Other car brands have pledged to sell only electric cars in Europe by the end of the next decade but had sought to avoid a firm 2035 deadline. Renault chief executive Luca de Meo said the shift to electric could take a long time: “The choice of going all electric for everyone and everywhere is not that obvious.” And the powerful European Automobile Manufacturers’ Association (ACEA) questioned whether sufficient charging infrastructure could be built in time. 

The industry letter, co-ordinated by Brussels-based green-mobility lobbyists Transport & Environment, says that passenger cars and light commercial vehicles account for 15% of Europe’s CO2 emissions and that electric vehicles will be a key pillar in the fight against climate change: “Every fifth car sold across the EU in 2021 had a plug.” 

Other signatories to the open letter include heavyweights such as Uber, Pfizer, SAP, Sanofi, Tesco, Unilever and even Toronto battery-recycling start-up Li-Cycle. Volvo Cars, which had already committed to stop selling gas and diesel models in Europe by 2035, said the EU’s 2035 law “would not only be in line with the goals of the Paris Agreement, which require 100% zero tailpipe emission vehicle sales in Europe by 2035, but it’s just the right thing to do.” 

The ACEA disagreed with the ministers’ decision, arguing that “any long-term regulation going beyond this decade is premature at this early stage.” In response, Volvo Cars said it would leave the association – following the lead of the fourth-largest carmaker, Stellantis (formerly Fiat Chrysler), which announced in June it would quit the ACEA to focus on its own “fact-based approach” to the future of mobility. 

But there aren’t just two sides to this story. Environmental lobby group Greenpeace denounced the ministers’ action, saying 2035 is too late to limit global heating to the Paris Agreement’s 1.5°C target. “Europe desperately needs to decarbonize transportation, but ministers missed a golden opportunity.”

For their part, the letter’s signatories predicted that the clarity of the 2035 deadline would accelerate the growth and innovation the EV market needs: “This will set in motion an urgently needed systemic transformation and make Europe a global leader in a key industry for a net-zero future.” 

Meanwhile, California regulators are also working toward a 2035 ban on new fossil-fuel vehicles. If approved later this year, the regulations would likely be adopted by more than a dozen other states, including New York and New Jersey, which have previously embraced California’s clean-car rules. 

Canada’s federal government says it will be bringing in a sales mandate to ensure 100% of new light-duty vehicle sales will be zero-emission vehicles by 2035.

The post Volvo, Chrysler maker swerve away from lobby group over EU electric car mandate appeared first on Corporate Knights.

Over the last year, many other car manufacturers have come forward with their own sparkling promises to pour money into the production of electric cars in Canada. But a recent report by the environmental organization Environmental Defence says these pledges are merely a “smokescreen” used by car manufacturers to distract from the fact that they are still selling millions of gas-powered vehicles. Keith Brooks, programs director at Environmental Defence, said in a press release that Canadians should take these commitments with a massive grain of salt. 

“The car companies make these promises over and over again, but they routinely fail to deliver, at least on scale. Meanwhile, they evade regulations and push ever more polluting SUVs on Canadians, all to pad the companies’ bottom line,” said Brooks. 

Environmental Defence takes issue with the fact that while car companies have promised to invest in manufacturing EVs, they’re still spending more on selling and promoting gas-powered vehicles that could hinder Canada’s emissions reduction goals. In recent years, a growing number of those vehicles have been gas-guzzling SUVs and pickup trucks. 

In the first half of 2020, just 3.5% of cars sold in Canada were EVs, a percentage that will need to rise quickly if the federal government stands a chance of achieving its net-zero goal by 2050. In 2019, transportation accounted for 25% of Canada’s emissions, which was just behind the oil and gas sector at 26%. In order to get more EVs on Canadian roads in the near future, Environmental Defence has called on the federal government to do more to restrict the sale of gas-powered cars and to encourage consumers to buy electric ones. The report argues for new federal taxes on the sale of SUVs and pickups that would pay for EV incentives “to make EVs more affordable for everyone.” The Toronto-based organization also wants the government to introduce new tailpipe emissions regulations and to implement a nationwide zero-emission vehicle standard that requires car manufacturers to sell an increasing percentage of electric cars in Canada.

“The car companies make these promises over and over again, but they routinely fail to deliver, at least on scale. Meanwhile, they evade regulations and push ever more polluting SUVs on Canadians, all to pad the companies’ bottom line.”
– Keith Brooks, Environmental Defence

China, the European Union and a number of states, such as California, have adopted zero-emission vehicle standards. Provincial governments in Quebec and British Columbia have also already implemented their own such standards, but advocates say a national standard is necessary to ensure the even distribution of electric cars in Canada. 

Environment Minister Jonathan Wilkinson recently announced that the federal government will follow suit on GM’s accelerated EV timeline, moving up its prohibition on selling gas-powered cars to 2035. It’s unclear at this point whether the federal government will adopt a national zero-emission vehicle standard or new tailpipe regulations, as it waits to see what the U.S.’s automotive emissions policies evolve into. Earlier this month, U.S. President Joe Biden signed an executive order that set a target that half of all vehicles sold in 2030 would be electric, but it wasn’t a legally binding requirement. Biden also announced that the U.S. would strengthen its tailpipe standards.

Canadian environmental groups welcomed Biden’s announcement as a step in the right direction for both countries but said the Canadian government needs to take more immediate action to reach its goals. “Canada cannot wait on Washington to realize its EV future. We’ll need to take that wheel ourselves,” said Joanna Kyriazis, senior policy advisor at Clean Energy Canada, in a statement.

The dire message from the Intergovernmental Panel on Climate Change’s (IPCC) most recent report expressed that urgency. The report noted that many of the effects of climate change are already irreversible – including shrinking ice caps and rising sea levels – and that it could take 20 to 30 years to stabilize global temperatures with “strong and sustained reductions in emissions of carbon dioxide (CO2) and other greenhouse gases.” U.N. Secretary-General António Guterres warned that the report “must sound a death knell for coal and fossil fuels before they destroy our planet.”

Unless the federal government here in Canada decides to take more immediate action, car companies will continue to promote and sell gas-powered cars that could be on Canadian roads for decades to come. 

Alex Robinson is the associate editor of Corporate Knights and an Ottawa-based journalist. 

The post Report: Automakers need to walk the talk on EVs appeared first on Corporate Knights.

“That’s a fact,” barks Jerry Dias, national president of Unifor, which represents workers in Canada’s automotive assembly sector.

Dias doesn’t drive an electric vehicle but is quick to add, “I will get one when my members build one.”

That day is approaching.

This past fall, Dias and his team finalized agreements to bring EV production to Oakville and Windsor, Ontario. In a wide-ranging interview, the head of the country’s largest private-sector union tells me how he lobbied key players to secure deals worth $1.95 billion at Ford and up to $1.58 billion at Fiat Chrysler.

Dias relishes telling the story. He stresses that the investments were the product of a remarkable alignment. “You had the federal government looking at major infrastructure spending, you had a pandemic, [and] the whole discussion of what does ‘build back better’ really look like.”

Unifor had long supported electric cars, but not all decision-makers were receptive. “[In 2018] you had Trudeau talking about greening the economy and you had Doug Ford saying the total opposite.” But in spring 2020, word leaked that Ford Oakville was planning to discontinue the Edge SUV. “So I contacted Dearborn [Ford’s headquarters in Michigan] and said, ‘What’s going on?’” Dias discovered the Edge would indeed be phased out in Canada.

“So then we really started to push the narrative,” he recalls. “I spoke with the Prime Minister’s Office, with [Infrastructure Minister] Catherine McKenna, with [Industry Minister] Nav Bains.” Dias told them EVs are the future. “About 3% of the world market is electric vehicles, but by 2040 it will be 50%.”

He believes Ford had little choice. “They weren’t going to close the only assembly plant in Canada. There would have been a war!” he says. “I got a call from Jim Hackett, who was the outgoing CEO from Ford, and then I got a call from Jim Farley, the incoming CEO, telling me [that] we’ll find a solution.”

While the Ford and Fiat Chrysler deals are seen as environmental victories, Unifor’s agreement with the third of the Big Three is problematic. In November, GM announced it will invest up to $1 billion in its Canadian operations to build traditional pickup trucks. I ask Dias how this squares with his climate commitments.

“We needed to get people back to work. If it’s 50% EV by 2040, it’s still 50% [internal combustion] … the key thing is to have your hands in both pots. This was about a short-term solution with a vision to the long-term.”

Dias is a bridge between conflicting worlds. He calls himself an environmentalist but represents oil workers. He acknowledges the planet is moving away from fossil fuel but thinks a complete transformation in 20 years is “too aggressive.” He sees values in nuclear power as a climate solution but feels the technology gets a free pass while wind is unfairly criticized.

“We have a wind turbine on our education centre [property],” he says. “There is not an issue that creates more dissent with our union in the community than that wind turbine. You’ve got a nuclear power station 10 miles down the road that if it went sideways would blow up the entire community. But there’s no debate on that; the debate is about my one turbine.”

Dias was born into a union family in 1958. His father worked at De Havilland Aircraft, becoming president of the local in 1967. Dias began his own career at De Havilland, spent a year at York University (“I hated it”), then returned to the company in 1978 and became shop steward. “My parents come from Guyana,” he explains. “In Canada they say, ‘The apple doesn’t fall far from the tree.’ In Guyana they say, ‘Goats don’t make sheep.’”

Perhaps Dias’s leadership is best demonstrated by his participation in a January 2020 picket line at Regina’s Co-op oil refinery. There to support locked-out workers fighting for pensions, he was arrested for mischief and sent to jail – a situation no Canadian labour leader had faced since postal workers’ president Jean-Claude Parrot rejected back-to-work legislation and went to prison in 1980. “I would never expect our members to stand up to the police on a picket line without doing it myself,” Dias says. “You have to lead from the front.”

Dias’s worldview is, finally, pragmatic. In 2024, Fiat Chrysler’s Windsor plant will indeed produce electric vehicles – but also internal-combustion vehicles. “This is all about options,” he argues. “You can fly two kites at the same time.”

None of this detracts from his role in launching Canada’s entry into the major leagues of EV manufacturing.

Dias doesn’t drive a Tesla. He’s driving something greater.

Gideon Forman is a transportation policy analyst at the David Suzuki Foundation.

The post Jerry on the job appeared first on Corporate Knights.

Historically, EVs have been about $12,000 more expensive than gas cars, in large part thanks to battery costs. But as batteries become cheaper every year, EV sales have been growing exponentially. The cost of lithium-ion batteries plummeted 89% from 2010 to 2020, according to Bloomberg New Energy Finance. In 2016, batteries accounted for 48% of the cost of EVs. Today, that’s fallen to 26%.

It’s not the only trend driving the conventional car industry off a cliff.

Pandemic is fuelling “peak auto”

Other than spikes in leisure-wear sales, the pandemic has dramatically slowed consumer spending – and cars are the second largest capital expense for North American families, after housing. Seventy million U.S. households own two or more cars, and pre-pandemic, the average American worker spent five work weeks a year in traffic commuting to and from their jobs. Now that approximately 40% of the U.S. and Canadian labour force is working from home and corporate leaders and businesses have accepted that people can do so productively, some families will decide they don’t need a second car. This will have big implications for car sales.

While some studies have found that those who are still commuting often prefer driving solo to taking the subway or ride-hailing, KPMG projects that the work-from-home trend, along with more people shopping online, could take seven to 14 million cars off U.S. roads alone.

A growing number of pandemic-era commuters who don’t want to crowd into mass transit are going the micro-mobility route, fuelling sales of bikes, e-bikes and electric scooters – particularly in place of the staggering 60% of U.S. car trips that are less than five miles. Scooter-sharing companies Lime and Bird are the two fastest-growing firms in U.S. history – both reached $1 billion in market valuation within 12 months of launch. All scooter-sharing companies combined are set to exceed 500 million rides globally in 2021.

In Canada, Calgarians have taken almost two million rides on rented e-scooters. There are also pilot projects in Waterloo, Montreal, Edmonton, Ottawa and Kelowna. For a growing cohort of millennials debating whether to buy a car or use a scooter-sharing service at 35 cents a minute, the choice is pretty clear-cut.

Shifting national policies

National policies are already dramatically accelerating the adoption of EVs. For instance, Norway has the most aggressive goals globally, prohibiting the sale of any new fossil-fuel-powered cars by 2025. The target is already working. In December, 67% of all new cars sold in the country were pure battery electric vehicles, and when plug-in hybrid EVs are included, that figure jumps to 87%.

In November, Britain announced that it would ban the sale of new gas and diesel cars and vans from 2030 onward – five years earlier than previously promised.

In the U.S., California has banned the sale of new gas-powered cars and trucks by 2035. Considering that California has the fifth-largest economy in the world, the move sends a strong signal to American automakers. The signal would be even stronger if Canada and the incoming Biden administration instituted a North America–wide ban on new internal-combustion vehicle sales.

Closer to home, Quebec announced it will ban sales of new gas-powered cars from 2035. Montreal may do so by 2030. B.C. will follow suit in 2040.

Pension fund liabilities

Traditional car companies face another threat: pension fund liabilities. Legacy auto companies made historical commitments to retired employees. Many of these had defined benefits. For some car companies, these future commitments exceed the value of the pension fund. That gap between the value of the pension fund and the liabilities is called “unfunded liability.”

General Motors is one of the 10 U.S. companies with the largest pension-funding gaps relative to their market capitalizations. GM’s unfunded pension liability is a whopping US$14.4 billion according to S&P Global Ratings – that’s about 24% of the company’s current market worth. Ford’s is US$10.2 billion, or 30% of its market value, as of November 2020.

Their pension troubles aren’t surprising if you track the market cap of GM, Ford and Fiat Chrysler (FCA). Even if you combined the market value of these three legacy automakers and multiplied by six, it would still be less than the value of Tesla, at US$717 billion as of December 2020.

Total cost of ownership

Electric cars are not only becoming cheaper to buy; they’re also cheaper to drive and have serviced. While the traditional gas car has more than 2,000 moving parts, an EV has just 20, which means there are far fewer ways that an EV can break down. Maintenance costs for an EV are a stunning 50 to 70% less than for a gas car. Similarly, fuel costs for an EV are roughly 70% less, depending on the electricity rates in your province or territory.

For Canadians, EVs will eventually be cheaper to insure, too. Since Teslas come equipped with a number of autonomous safety features and have been found to have 85% fewer accidents per million miles travelled compared to cars with no autonomous features, Tesla is offering policies to California Tesla owners at 20 to 30% less than traditional insurance companies. The company plans to expand its insurance to other U.S. states in the future.

Autopilot overtakes gas cars

ARK Invest predicts the rise of autonomous EV fleets by 2024. Think Uber and Lyft but green and without a driver. The predicted cost of transportation will plummet from the 70 cents (U.S.) per mile car owners pay to just 25 cents per mile – that’s a two-thirds cost reduction. Who is going to buy a new car when they can get around effectively with “mobility as a service” (MaaS) for a third of the cost?

Traditional car companies are facing death by a thousand cuts: the climate crisis, the fall of fossil fuels, electrification, the rise of autonomous EV fleets, Tesla, legacy pension liabilities, shifting mandated national policies, and dampened demand for autos in general. According to Cathie Wood, ARK’s founder and chief investment officer, EV sales will grow nearly 20-fold, from 1.8 million in 2019 to 35 million, or 40% of total global auto sales, in the next six years. I predict that two major global car companies will cease to exist by the end of 2025. They will either go bankrupt or merge – as did Fiat Chrysler, which in December got EU approval to merge with Peugeot.

In the U.S., the switch from horse-drawn carriage to car was swift. In 1910, only 11% of passenger miles were by car; by 1920, it was 81%. Expect the same swift shift from fossil-fuel-powered cars to EVs. The demise of traditional auto firms will come far faster than we imagine.

Jim Harris is the author of the international bestseller Blindsided, which focuses on disruptive innovation.

The post The top trends killing the auto industry appeared first on Corporate Knights.

Attempts to reduce transportation-related emissions have proven to be especially vexing, given that passenger (“light-duty”) vehicle trips account for approximately 30% of a city’s total carbon footprint – and cities account for approximately 70% of national emissions. Canadian consumers’ penchant for larger/heavy (less fuel-efficient) vehicles isn’t helping: SUVs and pickup trucks account for 70% of new vehicle sales in Canada

Another troubling but often-overlooked fact: CO2e (carbon dioxide equivalent) emissions related to the manufacturing phase of a vehicle are responsible for a sizable portion of a vehicle’s life-cycle emissions. So while greener cars are part of the solution, we also need fewer cars to be made and sold.

So how do we catalyze a faster tipping point for decarbonizing passenger vehicle transportation? Governments must introduce policies that will shift consumer behaviour. These policies should be aimed at three objectives: promoting zero-emission vehicles (ZEVs), expanding shared-mobility service, and fostering commuters’ embrace of multimodal forms of low-carbon transportation ­– the nexus being the greening of all public transportation infrastructure.

Shared-mobility services ­– commonly referred to as “transportation as a service” (TaaS) – are not limited to taxis and ride-hailing services. Car-sharing services, including Evo and Communauto in Canada, have proven to be popular, and successful, in urban markets where supportive city policies exist – a must for such services to be viable. Aside from car-sharing’s affordability, it also has a smaller carbon footprint, particularly when compared to ride-hailing services like Uber. Many people are surprised to learn that more than half of ride-hailing’s VKTs (vehicle kilometres travelled) are without any passengers in the vehicle. These “deadhead” trips mean that ride-hailing produces up to 69% more emissions than the trips it displaces, according to a report by the Union of Concerned Scientists.

Public debate over the challenges of electric vehicles often centres on the lack of charging stations. First and foremost, new policies should be aimed at dispelling consumers’ range anxiety associated with ZEVs. But while the “supply of charging” needs to be addressed in short order, attention should also be paid to initiatives that foster “demand for charging” by promoting the expansion of ZEV-based, shared-mobility services in lieu of private vehicle ownership.

ZEV car-sharing has a number of advantages beyond its low carbon footprint: electrifying car-sharing has the inherent benefit of allowing drivers to “try before you buy,” which in turn can generate word-of-mouth buzz about the appeal of the ZEV driving experience – and best case, with car-sharing’s convenience related to parking (free and preferred locations), might just seduce a would-be ZEV buyer to become a ZEV car-sharing user instead.

Perhaps car-sharing’s most powerful “climate virtues” relate to the second-order (knock-on) effects. Multiple studies indicate that car-sharing yields a handful of desirable behavioural changes. First, there’s the “suppression effect”: ­it encourages car-share members to avoid purchasing vehicles altogether. A highly regarded University of California, Berkeley Future of Mobility White Paper indicates that each car-share vehicle displaces approximately 10 privately owned vehicles – and the emissions produced in their manufacturing along with them. Increasing the use of electric vehicles in TaaS fleets is like “super-sizing” the climate benefits, compared with privately owned ZEVs.

Another effect, and likely the most impactful behavioural change climate-wise, is that car-share users tend to adopt multimodal forms of commuting – meaning that a given commuter trip might be a combination of car-sharing with other low-carbon modes of mobility, such as public transit, walking or cycling.

Finally, another benefit of car-sharing’s affordability is it would make EV access more equitable. Car-sharing is less expensive than taxis (by more than 50%) and ride-hailing (30% to 50% cheaper).  Making ZEVs available to lower-income households via car-sharing also gives them access to the health benefits of a non-polluting vehicle, as well as the cutting-edge safety features that are standard with many ZEV models.

The synergies of coupling the climate virtues of car-sharing with electric vehicles’ low carbon footprint, offers great potential to realize a “green tipping point” for transportation, on a much-advanced timeline.

What federal policies could catalyze that event?

1. Apply Vancouver’s Climate Emergency Action Plan to Toronto and Montreal to achieve 50% ZEV of total vehicle kilometres travelled by 2030 (originally 2040) – reducing annual baseline emissions of 20 megatonnes (Mt) in 2019 to 10 Mt by 2030.

2. Offer a federal $10,000 “ZEV fleet incentive” rebate (double the existing $5,000 under the iZEV program) for 20,000 electric light-duty vehicles, specific to private TaaS operators who own/lease their fleet vehicles ($200 million) and remove the cap of 10 ZEV rebates per year. In turn, provinces, like B.C., should be encouraged to offer a similar fleet-specific ZEV rebate for TaaS (doubling the existing iZEV rebate to $6000), which would be more in line with Quebec’s generous rebate of $8,000.

3. Set up a loan guarantee program of 80% of ZEV loan/lease value, backstopped by a federal guarantee.

ZEV-based car-sharing is climate smart ­– not to mention easy on the pocketbook. Given the narrow time frame that society has to act, can we really afford to wait?

David Punch is the founder of Vancouver-based Sky Energy Capital.

Appendices: View associated tables & charts

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When the pandemic hit, Canadians were spending over 200 hours per year in their cars, driving a total of more than 300 billion kilometres a year – 2,000 times the distance from the earth to the sun. The cost of owning and maintaining private automobiles comprises a larger share of household spending than food, clothing or any other household expense except shelter, even without including the share of taxes that goes to building and maintaining the transportation infrastructure. Yet cars are parked 95% of the time and are increasingly slowed down by traffic congestion during the 5% of the time they are actually being used. 

We know that the gasoline-powered mobility system is not sustainable. Transportation accounts for 25% (185 megatonnes of carbon dioxide equivalent) of our total national greenhouse gas emissions, and between 1990 and 2018, GHG emissions from transportation grew by an eye-watering 53%. The trend is sobering and should make us reflect. In cities, our cars, SUVs and pickup trucks as well as the light freight vehicles that deliver our e-commerce purchases account for as much as 50% of the urban carbon footprint, bringing with it the air pollution that shortens the lives of children and adults alike. 

Canada’s aspirations to make the transformation to a low carbon economy are not achievable without deep reductions in personal vehicle emissions. Transportation remains a major and growing source of GHGs and air pollution. When we turn our attention to how we will restore our lives and our economy once the pandemic passes, the future of the system of our transportation and mobility services emerges as a key question. The post-COVID recovery presents a historic opportunity to make major improvements in Canada’s transportation system.

What would it take?

The Active and Safe Mobility Fund and Free and Safe Transit Fund

Physical distancing has encouraged new habits that depend on walking and cycling rather than driving and taking public transit. Let’s try to keep some of these new habits.

A number of cities are enabling more people to walk and cycle while maintaining physical distance by converting roads into pedestrian and cycling areas. There are several cities globally that are implementing low-emission zones (LEZ) or zero-emission zones (ZEZ), sometimes called exclusion zones. Currently, there are no such zones in Canada. –Some cities, such as Vancouver, are considering zero-emission zones, but no formal zones have been implemented. Low-emission zones benefit the health of residents thanks to reduced air and noise pollution resulting from a general reduction in vehicles entering the area. They can also be a source of revenue for the city implementing the policy, money that could in turn be redirected toward environmental initiatives and perhaps electric vehicle incentives.

In some cities, the thinking has shifted from giving preferential treatment to zero-emission vehicles to prioritizing pedestrians and cyclists and other active mobility as a way of getting around. For example, Milan has announced that over the summer, 35 kilometres of streets will be expanded for increased cycling and walking space to protect residents as COVID-19 restrictions are lifted. Closer to home, Vancouver banned vehicular traffic in Stanley Park, with the roads remaining open to joggers and cyclists. The change is temporary, but there are voices calling to implement the policy permanently. In general, active mobility corridors have several benefits, including reduced air pollution, greater opportunities for outdoor recreation in cities and incentives to use active mobility modes for transport instead of cars – once again improving the general health of the population. And spaces for active mobility where the air is clean may also play an important role for recreation that is affordable for families living with the economic fallout of COVID-19. That is why our first proposal for creating jobs by building back better mobility is for an Active and Safe Mobility Fund. 

This fund would support communities by creating permanent corridors for safe and active mobility for people walking and cycling to work and school, while maintaining physical distancing. The grants would be available for all permanent active mobility corridors that municipalities implement within the next 12 months. This program would put people to work right away by leveraging the pressing need for safe, active mobility. 

In addition, we are proposing a Free and Safe Transit Fund. This fund would ensure that people have free access to transit throughout all of Canada’s municipal transit systems for one year. It would require $6 billion in stimulus spending, which would flow directly into the pockets of people, with a strong tilt toward lower-income groups, where the GDP multipliers are highest. This fund will support essential and other workers who rely on public transit at a time when every dollar counts. It will also ensure that students are able to get to school without worrying about the cost of transit fare. The fund will guarantee the revenues that user fees have previously represented. It will also provide the cash needed to enable transit authorities to hire additional staff to clean the surfaces of vehicles and cars.

Where greater distances make walking and cycling unfeasible, and where transit is not able to meet mobility needs, we need to take a deeper look.

Electric vehicles are a must-have 

The reductions in the cost and improvements in the performance of electric vehicles are reminiscent of an earlier historical period, exactly 100 years ago. In 1920, in the wake of the global influenza pandemic, relatively few Canadian households owned a car. Ten years later, half the households in Canada had a private automobile. Every year throughout the 1920s, the price of owning a car dropped and the comfort and performance of the cars improved. We are at a similar fork in the road with electric vehicles. They are so much more efficient than fuel-powered cars that in spite of the higher cost of electricity, they cost much less to operate than cars that run on fossil fuels (about 80% less) and need less  maintenance. The total cost of ownership over the lifetime of an electric car is now lower than for a gas-powered vehicles in most cases, and sticker-price parity with gas-powered cars is expected within the next three or four years. 

There is another interesting parallel with the early history of the car in Canada. In the 1920s, the roads infrastructure and fuel distribution systems to support the burgeoning car population lagged behind the growth in car sales, as did consumer credit support for car purchases. Governments scrambled to build and pave the roads, and financing innovations paved the road to affordability for average families. Electric cars now face a similar situation – the cars are ready and Canadians are ready, but the financing and charging infrastructure lags behind.

By switching from gas and diesel to electricity for transportation wherever it’s feasible, it is possible to save money while making our drive to a net-zero emissions economy a reality. The situation is reflected in the federal government’s current goal for zero-emission vehicles (ZEVs), which is to capture 10% of all passenger vehicle sales per year by 2025, 30% by 2030 and 100% by 2040. 

However, Canada’s rate of zero-emission car, truck and bus deployment lags far behind that of other cold-climate peers – like Norway, where in 2019 electric vehicles represented 56% of all new cars sold (with the goal of electric vehicles being 100% of all new car sales by 2030). In Canada, electric vehicles, including hybrids, represent only 3.5% of passenger vehicle sales. In 2018, the market share of battery electric vehicles (BEVs) in Norway was 29.5%, while Canada lagged far behind at only 1.2%, in the company of the United States (1.62%) and Germany (1.05%). 

If our goal is to reach net-zero GHG emissions by 2050, why is Canada stalled? There are many moving parts to the mobility and transportation market, but there are at least four areas we need to improve: 

• providing loan guarantees to buyers where credit markets are still emerging (i.e. leasing and lending structures);
• accelerating investment in public infrastructure on which carbon-free vehicles depend (i.e. EV charging stations); 
• broadening eligibility for incentives to make up for the difference in price between new carbon-free vehicles and internal combustion vehicles (i.e. including fleets as eligible for EV incentives); and
• attracting investment to establish competitive supply chains (i.e. to process minerals needed to make batteries, as well as make and assemble components for EVs and charging stations and to assemble electric vehicles).

Canada has  programs in place to address some of these elements but needs to do much more. So let’s look at how stimulus programs by the federal government can contribute to creating efficient credit markets; increase EV purchases by individuals, businesses and public institutions; build charging infrastructure; and attract investments to create supply chains for a variety of EVs, including private automobiles, transit and school buses, and light freight trucks.

Establish efficient carbon-free lending for EVs

Let’s start with the consumer who wants to buy an EV. Buying a car became easier over the 20th century, ever since Henry Ford put his mind to making the purchase of a Model T something his employees could manage on the salaries he could afford to pay them while still keeping the price of the Model T down. To make things work, his employees needed to pay for their cars over time. The solution was for the banks to treat the car as an asset that could be used to underwrite the loan needed to buy the car. Doing this was a little tricky because in order to have “security,” the banks needed to know the value of the car from the time it rolled off the production line and was purchased, and each year thereafter for the duration of the loan. With this information, a bank could lend money for a car purchase because if the borrower could not pay back the loan, the bank could take back the car and sell it to repay what was owed. The risk of default was therefore very low, and as a result buying or leasing a car could cost only a little more than the “sticker price.” 

Fast forward to today.

Anyone who has tried to lease an EV in Canada has experienced sticker shock. And the shock is not from the price difference between the EV version of a car model and the ICE edition. The incentives mentioned above address most of that gap. The shock is from the cost of financing the vehicle: banks currently have little historical data on what the value of an EV will be at the end of the lease period, so the monthly lease payments for an EV are much higher, because of unrealistic worst-case actuarial assumptions that the EV will experience maximum depreciation over the course of the lease. That means monthly payments for an EV lease are often twice those of its ICE equivalent. Just like when Henry Ford started selling Model Ts, banks don’t yet have sufficient information on the value of an EV in each year of life after purchase, to the end of its useful life. Similar to our deep-retrofit finance proposal, we propose a federal guarantee of EV automotive loans over a period of three years to enable banks to collect data on the real residual value of EVs so that they can be financed in the same way as ICE vehicles are today.

Incentives for carbon-free ride sharing

Electric vehicles are starting to make their way into the Canadian market, but, as stated, we have not been quick off the mark. In 2018, only 1.2% of new motor vehicles registered in Canada ran completely on batteries, with no reliance on an internal combustion engine. That was a near doubling of sales from 2017, but we are a long way from the market share penetration of battery electric vehicles (BEVs) in another cold, sparsely populated, oil-producing economy: the market penetration of BEVs in Norway was 25 times higher than ours in 2018, at 29.5% of all registered cars. And in Canada, the up-take is much higher in some provinces than others, with 97% of EVs registered in 2018 in three provinces: Quebec, Ontario and British Columbia. 

One way to make progress fast is through car-sharing services such as EVO and Communauto, which have grown in popularity. These services enable us to access a  fleet of shared cars when we need it. They are hugely popular in cities like Paris, where many people have forgone the financial burden of owning, maintaining and insuring a car and the hassle of finding and paying for parking. Instead people are opting to use the EV fleet operated on behalf of the city of Paris. These EVs are parked next to charging stations in hundreds of prime locations designated by the city. 

Ride-hailing services such as Uber and Lyft have also grown quickly. Like car-sharing services, these are part of the growing category referred to as “mobility as a service” (MaaS). They have proven to be popular, but today, more than 50% of vehicle kilometres travelled (VKTs for short) are with no passengers in the vehicle. This has led researchers to conclude that ride-hailing services produce 69% more emissions than the trips they displace. That’s a steep price to pay for the convenience of instant mobility when the cars that provide that service are powered by ICEs. So to make ride hailing more economical for drivers and lighten these services’ environmental and health impacts, converting these cars to electric vehicles is a priority. For this reason, we propose that the existing federal zero-emissions vehicles program be extended to include ride-sharing and ride-hailing fleets (and that these incentives be available upfront rather than after purchase). Because BEVs cost less to operate than ICE vehicles, this program puts money in the pockets of drivers within one year.

On your marks, get ready, install more EV charging stations

Charging stations, either at home or on the way to and from our destinations, need to be available for us to be able to use our EVs – just as is the case with ICE cars and gas stations. In light of the slow growth in EV use in Canada, it’s not surprising that Canada’s position on EV charging stations also needs a big boost. 

With 5,004 charging stations, Canada’s ratio of charging stations to 100,000 inhabitants is 13.4, which is 35% that of France, 41% that of Germany, 47% that of the UK and only 7% of that of Norway (which has 186 charging stations per 100,000 inhabitants!).   The current focus of the federal Zero Emission Vehicle Infrastructure Program (ZEVIP)*, targeted at owners and occupants of multi-unit residential buildings (MURBs), is primed and ready to support the installation of charging stations within the year. But more could be done to speed up the deployment of charging stations where people live and work.

The ZEVIP program has $130 million in funding over five years and covers 50% of the cost of charging installation for eligible transit, workplace, fleet, on-street and multi-unit residential projects.  To accelerate the stimulus impact of installation jobs over the next 12 months, this program could be expanded to cover 100% of the expense of installing charging infrastructure (80% grant, 20% loan guarantee), with a focus on fleets and professional drivers to help reduce business costs during the economic downturn. The program could also be expanded to enable transit operators to prepare to operate electric buses and for the next 12 months – as we have recommended for EV purchase incentive– should be based on delivering funding in advance of the EV installation project, rather than after project completion.

To grow Canada’s EV charging infrastructure to levels approaching those of other advanced economies, this program could include hard targets of 1,500 public fast-charging stations; 10,000 stations for cars, SUVs and pickup trucks; 1,000 for fleet use, including local delivery vehicles; and 1,000 for transit to support bus electrification over the next 12 months. 

On your marks, get set, electrify the Trans-Canada Highway

Public charging stations are a key piece of the puzzle to ensure we get the electric vehicle growth we need. Connecting us from West to East and acting as the backbone for many roads “inland” is the Trans-Canada Highway. But efforts to electrify the Trans-Canada have not been realized, and there are interoperability issues with current charging stations. In some cases, matters are complicated by contractual arrangements for highway rest stops that are physically on Crown land but are governed by long-term leases held by companies that sell gasoline and diesel as well as provide food and services to travellers. With COVID-19, traffic to these rest stops is, and is likely to remain, depressed. 

For this reason, we have proposed the Electrify the Trans-Canada Highway program, which would leverage existing programs to deliver a public alternative in the form of 500 ultrafast charging stations, each containing 10 slots to charge passenger vehicles in five minutes and two slots for heavy freight haulers ultrafast charging. This would do for electrified transportation what the National Dream did for rail. 

Leveraging Canada’s EV supply chain to create an EV manufacturing hub

Our last proposal is to be ready to seize the opportunity to attract investment to establish a competitive Canadian supply chain for electric vehicles. Canada has a number of companies today that are making and assembling parts for electric buses and light freight trucks. It also has tier-one automotive manufacturers, as well as world-class nickel resources, which are key minerals for electric batteries. 

As part of a low-carbon recovery, Canada can build on this advantage to establish an EV manufacturing hub to harness the economic benefits of the growing global market for ZEVs. Creating an EV manufacturing hub could be accomplished with a dedicated industrial development strategy to identify potential clusters of expertise for expansion. Stimulus could play a part in this through a federal incentive of 50% for the cost of new facilities that create jobs (half grant, half loan guarantee). Ensuring that Canadians have the benefits of our move to zero-carbon transportation requires us to be competitive and ready to attract the industrial infrastructure for carbon-free vehicles and trucks. 

Building Back Better Transportation

The Opportunity

Tens of thousands of jobs could be created over the next 12 months with programs to support the electrification of transportation and construction of new cycling infrastructure. Many of the investments, such as those in charging infrastructure, facilitate and leverage much larger investments in the electrification of the transportation sector. Incentives for companies that are manufacturing EV components can help put Canada on a low-carbon recovery pathway and create good jobs. Transportation currently accounts for 25% of Canada’s emissions. These investments could reduce GHGs by at least 12 Mt CO2e per year by 2030, improve air quality, save drivers money and benefit people’s health by making active and public transportation more accessible. 

The Proposal

Stimulus investments to create jobs

The Government of Canada has made commendable progress over the last five years in the establishment of programs to increase the number of zero-emission vehicles (ZEVs) on Canada’s roads. To stimulate jobs over the next 12 months, these programs need to be turbocharged in a time-limited way, including:

1. Active and Safe Mobility Fund: Cycling and other modes of active transportation are important for reducing congestion and GHG emissions in cities, and can provide economic opportunities for tourism in smaller communities. Many municipalities have a roster of cycling infrastructure projects awaiting funding. Federal funding for projects that can begin construction in the next 12 months could create construction jobs, enhance cycling infrastructure and improve the health and safety of residents.Cost: $2 billion
2.  Free and Safe Transit Fund: This proposal would ensure that people have free access to transit throughout all of Canada’s municipal transit systems for one year.  Funds would flow through existing programs It will also provide the cash needed to enable transit authorities to hire additional staff to clean the surfaces of vehicles and cars.

Cost: $6 billion

3. Installation of charging infrastructure (national): The current Zero Emission Vehicle Infrastructure Program (ZEVIP) and Electric Vehicle and Alternative Fuel Infrastructure Deployment Initiative (EVAFIDI) cover 50% of the cost of charging installation. To kickstart installation jobs in the near-term, the government could launch new fast-track requests for proposals (RFPs) and would provide the financing in advance for any proponents able to complete projects over the next 12 months and ensure the program is sufficiently funded to support eligible projects. A loan guarantee should be provided for the additional cost for proponents that need it.

To have the desired job-creation impact in the near-term, the delivery of the program funding will need to be streamlined and efficient, using financial institutions to speed delivery if needed. The priority should be placed on projects that help fill gaps in the current Trans-Canada network and improve interoperability. 

4.Installation of charging infrastructure (local): To kickstart installation jobs in urban areas, federal support for the cost of installation and electricity upgrades could be provided to building owners, homeowners, municipalities, utilities and other businesses. This should include DC and Level 2 chargers and be in the form of 50% grant and 50% loan guarantee for projects that can be completed over the next 12 months. Electric vehicles can also provide distributed storage and peak management services to the new electricity system that is emerging, but only if the charging infrastructure is “vehicle-to-grid” ready. 

5.Incentives for ZEV fleet purchase: The current iZEV program provides a point-of-sale rebate for the purchase of a ZEV up to $5,000 per vehicle. Over the next 12 months, passenger fleets could be further incentivized to purchase ZEVs by: doubling the incentives from $5,000 to $10,000 for fleet vehicles

• doubling the incentives from $5,000 to $10,000 for fleet vehicles (for 12 months)
• providing a loan guarantee for the remainder of the vehicle cost, secured by the government;
• simplifying the process for consumers with a one-window approach for the loan and rebate at the time of purchase; and 
• removing the cap on the number of vehicles per business for “mobility as a service” companies such as car sharing, taxi companies and ride hailing to support uptake among those for whom the current tax incentive does not apply.

This could help these businesses and drivers save an estimated $6,000 to 8,000 per year per vehicle on operating costs and support businesses that manufacture ZEV components. In addition, a new rebate should be available for heavy duty vehicles to support the conversion of delivery truck fleets. This rebate should significantly help close the gap between the cost of purchasing fossil fuel vehicles compared to ZEVs.  

  Recovering with zero-carbon transportation jobs

6. Creating an EV manufacturing hub: Canada already has businesses with expertise in batteries, auto-parts manufacturing, assembly, autonomous vehicle technology and materials. As part of a low-carbon recovery, Canada can build on this advantage to establish an EV manufacturing hub to harness the economic benefits of the growing global market for ZEVs. This could be accomplished with a dedicated industrial development strategy to identify potential clusters of expertise for expansion and a federal incentive of 50% for the cost of new facilities that create jobs (half grant, half loan guarantee). 

7. ZEV Mandate: Canada can send a strong signal to ZEV suppliers by adopting a federal ZEV mandate that ensures Canada meets its targets for zero emissions light duty vehicles of 10% by 2025, 30% by 2030 and 100% by 2040. A mandate for manufacturers would ensure that Canadians have access to ZEVs and create additional incentive for the establishment of an EV manufacturing hub. 

As was the case with our proposals for green buildings and green power, the same kinds of “new normal” innovations have been making their way into the mobility sector for some time – changing how we access transportation services. These big changes are coming to the array of ways we rely on to access our workplaces, to see friends and family, for freight delivery to bring the food we eat to nearby stores, to deliver parcels and all of the millions of moving parts in the transportation system that keeps the economy going.

*Program name corrected.

To learn more, explore our transport calculator:

CK Transport Calculator

Ralph Torrie is senior associate with Sustainability Solutions Group and partner at Torrie Smith Associates.

Céline Bak is the founder and president of Analytica Advisors.

With files from Gilliean McEachern,Toby Heaps, Aleena Naseem and Laura Väyrynen

Notice to reader: Please be aware some of the figures and other details in this white paper have been updated in the Final Report to reflect feedback.

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