While EV uptake has moved beyond the early adopters, concerns around public charging reliability continue to give many North Americans pause. According to J.D. Power’s latest survey, Canadians who aren’t currently considering purchasing EVs say that range anxiety (63%) and a lack of charging station availability (55%) are factors holding them back.

For everyday driving, EVs are largely charged from the comfort and convenience of the owner’s home. At-home recharging accounts for 80% of charge time for personal EVs, according to the government of Quebec. It’s around the remaining 20% that Canadians get nervous. That includes drivers who are unable to install EV chargers at home, such as those who live in condos or apartments or who rely on street parking, plus trips that exceed the distance covered by a vehicle’s full range (like, say, a drive from Toronto to Montreal). For these scenarios, EV charging relies on public infrastructure.

We analyzed existing public charging infrastructure in eight Canadian cities to see how closely these concerns are met with reality.

The state of EV chargers in Canada

Reliable information on charging stations is still hard to come by.

We started our search with publicly available data from Natural Resources Canada’s Electric Charging and Alternative Fuelling Stations Locator. However, we quickly found discrepancies between NRCan’s data and that published by resources such as PlugShare, Google Maps and individual charging networks. In instances where NRCan’s data is incomplete or unclear, we supplemented it as much as possible using data from these other sources. The average EV driver cannot do this depth of research when seeking charging stations on the road, which is bound to result in frustrating and negative experiences. Early adopters have persisted through this issue for years, but better solutions are needed as electric driving goes mainstream.

Infrastructure needs are about to change rapidly.

The lines between Tesla’s charging protocol – now referred to as the North American Charging Standard (NACS) – and other port types are blurring. While owners of Teslas and other EVs were formerly limited to their native port types, adapters are now available that allow drivers to use more charging stations. Plus, many auto brands have announced their intent to switch from the “combined charging system” (CCS) – currently the non-Tesla fast-charging standard – to NACS beginning in 2025, including Volkswagen, Hyundai, General Motors, Subaru, Honda, Jaguar Land Rover, Volvo/Polestar, Rivian and others. Staying ahead of this incoming shift in demand while continuing to meet the needs of owners buying today could be a delicate process to navigate.

About this data

Chargers: Counted within each city and any contiguous suburbs as noted. Data to calculate EV chargers per 100,000 people is based on 2021 census data from Statistics Canada for the same geographic areas. Note that the number of ports is higher than the number of chargers; many direct current (DC) fast-charging stations have multiple port types available, but only one can be used per station at a time.

Charger use type was separated into three categories:

Tourist: Likely to be used by visitors or drivers transiting through the city. Includes fast chargers at gas stations, rest stops or retail areas near highways, as well as hotels and key tourist destinations.

Local: Best located for use by residents. Includes multi-unit dwellings, office buildings, shopping centres away from major highways, libraries or municipal buildings, schools, hospitals, airports, community centres and transit stations.

Business: Includes fleet garages, industrial areas and car dealerships. Stations tend to have restricted hours and prioritize owner use over the general public.

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

This story is part of the Sustainable Cities section in our Spring 2024 issue. 

The post EV Faceoff: Which large Canadian city has the most chargers? 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 May 2021, Ford became the first mainstream automaker to reveal an electric pickup, the F-150 Lightning. By December, Ford had to cap its initial reservation list at 200,000 and announced plans to nearly double its planned production to a total of 150,000 units annually.

“We had to stop reservations, we got so many,” CEO Jim Farley told CNBC.

Clearly, early demand suggests the market is ready for electric trucks, which could play a significant role in decarbonizing transportation. Pickups comprise an estimated 20% of vehicle sales in the United States and filled the top three spots on the bestselling vehicle list in 2021. The top-selling Ford F-150 holds 3% of the industry’s total market share all on its own. In Canada, full-size pickups accounted for four out of the top 10 bestselling vehicles last year. The Ford F-150 crowns this list as well, a position it has held in Canada for 12 years in a row.

There’s no denying these trucks contribute significantly to the transportation sector’s carbon emissions. According to data collection agency Statista, light-duty trucks accounted for 17% of transportation-related emissions in the United States in 2019.

While the early numbers for Ford’s electric truck are promising, not all pickup drivers are sold on EVs. As is often the case with electric vehicles, the prices on these trucks may generate sticker shock. In the U.S., this is offset somewhat by the Ford F-150 Lightning’s entry-level Pro grade, which is priced at less than US$40,000 before fees. In Canada, the most affordable version of the F-150 Lightning is the XLT, which starts at CDN$68,000.

This makes the F-150 Lightning a prime candidate for a cost-of-ownership analysis, not only because its gas-powered equivalent is the bestselling vehicle in North America, but also because the F-150 Lightning is the electric truck for which we currently have the most details.

The proposition is different in Canada and the U.S., but on both sides of the border, the electric F-150 makes a solid case for itself.

Canadian analysis

For our Canadian cost-of-ownership analysis, we went straight to the heart of pickup country and based our assessment on ownership in Alberta.

On the electric side, we priced out a 2022 Ford F-150 Lightning Lariat, which is likely to be the volume trim, with features such as blind-spot monitoring, an upgraded infotainment system and a 9.6-kilowatt Pro Power Onboard generator system. All F-150 Lightnings come with all-wheel drive and are configured as four-door SuperCrew cabs with a 5.5-foot box by default. With the standard 370-kilometre battery and no additional features, our example rings up at CDN$82,095, including fees.

Because of its high starting manufacturer’s suggested retail price, the F-150 Lightning does not currently qualify for federal or provincial rebates. The federal Incentives for Zero-Emission Vehicles (iZEV) program applies only to vehicles with six seats or less and a starting price of less than $45,000. For vehicles with seven seats or more, the starting price must be less than $55,000. Quebec caps its provincial program at a starting price of $60,000, while B.C. matches the federal figures.

The Globe and Mail reported in December 2021 that the federal government is considering updates to the iZEV rebate program to include more popular vehicle segments such as higher-priced SUVs and pickups.

In the meantime, buyers purchasing the truck for business use receive a federal tax writeoff of $55,000. Since we’re assessing for personal use, we’ve left this out of our calculation.

Official energy consumption figures for the truck have not yet been released by Natural Resources Canada. The Union of Concerned Scientists estimates that the F-150 Lightning will consume between 0.285 and 0.31 kilowatt hours (kWh) per kilometre (converted from U.S. figures). We calculated based on a midpoint of 0.3 kWh per kilometre at $0.08 per kWh, the average electricity rate in Alberta in January 2022.

Our gas-powered equivalent is also a Ford F-150 Lariat in the same configuration as the Lightning. Five engines are available and purchase rates among them are similar, so we’ve chosen to upgrade our example to the 3.5-litre twin-turbocharged V6 ($2,350), which strikes a balance between the base 2.7-litre V6 and the highest-powered 5.0-litre V8. The optional 4X4 system, which is needed to match the Lightning’s standard all-wheel drive, is $5,200 extra.

Ford’s truck engines take regular-grade fuel. As of early February 2022 (before Russia invaded Ukraine), the average fuel price in Alberta was $1.43 per litre and trending upward. Given that our analysis covers a 10-year period, we went with a conservative estimate of $1.50 per litre as an average.

Based on these figures, and calculating over a 10-year ownership period, we estimate that an F-150 Lightning owner would spend $12,334 less for an F-150 Lightning over an equivalent gas-powered F-150.

However, this calculation is based on the standard battery, which carries a range of 370 kilometres. The extended-range battery, which lengthens the Lightning’s range to 483 kilometres (slightly less on the Platinum grade), is a $13,380 upgrade and effectively wipes out these gains. As battery prices come down with demand, this premium is likely to be reduced over time.

U.S. analysis

For our U.S. assessment, we’ve based our figures on the state of New York. We’ve chosen to work with the entry-level Pro grade with a base price of US$39,974, which includes the standard 230-mile battery (no extended-range battery is available on this trim). With the standard 5.5-foot bed, SuperCrew cab and dual-motor all-wheel drive, the final price is $41,669, including a $1,695 destination charge.

The Environmental Protection Agency also has not released energy-use estimates. Based on Union of Concerned Scientists estimates of between 0.46 to 0.50 kWh per mile, we’ve calculated based on usage of 0.48 kWh per mile and the current average electricity cost in New York of $0.20 per kWh.

The closest gas-powered equivalent is the Ford F-150 XL, with a SuperCrew cab, 5.5-foot bed, and the 3.3-litre V6 engine. We added four-wheel drive to match the Lightning’s all-wheel drive, which bumps up the price by $3,510 for a total of US$43,550. For this truck, our fuel cost estimates are based on the average price of fuel in New York in February: $3.42 per gallon.

The bottom line? A Ford F-150 buyer would save just over $20,000 in a 10-year ownership period by choosing the F-150 Lightning Pro over its gas-powered equivalent. If gas prices keep climbing, they would save even more.

The post Can the electric F-150 finally rev North America’s EV revolution into top gear? appeared first on Corporate Knights.

While ramping up sales of electric passenger vehicles is important and inevitable, last-mile freight delivery offers the lowest-hanging fruit for rapid reduction of carbon emissions. As of today, Natural Resources Canada data show that transportation-related emissions account for 20% of all Canada’s emissions, and freight-related sources represent 42% of that. A 2020 World Economic Forum report predicted that growing demand for e-commerce could bring 36% more delivery vehicles into inner cities by 2030 and increase traffic congestion and emissions by more than 30% in the world’s top 100 cities – problems exacerbated by increased demand for same-day delivery, which more often sees half-empty trucks making rounds. If nothing is done to change the course, the Calgary-headquartered Pembina Institute warns, emissions from last-mile freight delivery will outpace those of passenger vehicles by the end of the decade.

Meanwhile, Canada has committed to reducing its greenhouse gas emissions by 40% to 45% below 2005 levels by 2030 and to being net-zero by 2050. Reversing the emissions trajectory of last-mile deliveries is key to keeping Canada and the world on track for meeting emissions targets.

Government investment

The first step is targeted investment. The federal government’s spring budget announced funding for a number of measures that would help accelerate the EV transition, including $56 million over five years to implement standards for ZEV (zero-emission vehicle) charging and fuelling stations. There’s also $46 million allocated to advancing Canada’s critical battery mineral supply chain and a tax break of 50% for corporations and small businesses that manufacture zero-emission technologies.

There’s less in the way of funding for individual businesses looking to convert their fleets. The federal Incentives for Zero-Emission Vehicles (iZEV) program allows businesses to write off 100% of the purchase costs of eligible zero-emission passenger vehicles up to $55,000. Quebec offers businesses the same incentive as consumers, meaning that zero-emission vehicles with sticker prices of $60,000 or less qualify for a rebate of $8,000. British Columbia’s fleet program is the most robust in Canada: companies can recoup up to one-third of the purchase price of medium- and heavy-duty zero-emission vehicles, or two-thirds for tourism and hospitality businesses, up to a cap of $100,000 per vehicle through the Specialty Use Vehicle Incentive.

Governments can also lead by example. American President Joe Biden announced in January that the U.S. government’s 650,000-unit fleet (most of which are postal vehicles), will be replaced with electric models. To date no similar commitment has been made by the Government of Canada.

Automakers retooling

Each of the Detroit Three automakers has committed at least $1 billion to retool vehicle assembly plants in Southern Ontario to EV production. The most pertinent development for fleet operators is General Motors’ commitment to convert its CAMI assembly facility in Ingersoll, Ontario, to produce battery electric delivery vehicles, making it the first large-scale production plant in Canada to do so.

FedEx Express has signed on to be the first customer for BrightDrop, the GM subsidiary with products to be assembled at CAMI in Ingersoll. The first of an undisclosed number of FedEx BrightDrop vehicles are expected to be operational by the end of 2021. The entire FedEx parcel pick-up and delivery fleet will be zero-emission by 2040, with 50% of all new vehicle purchases to be electric by 2025 and 100% by 2030.

Ford Canada announced in May that more than 450 commercial customers have stated intentions to purchase its Ford E-Transit, which benefits from battery development shared with the Mustang Mach-E BEV.

“A leadership position would require committing to an all-electric fleet by 2030 or soon thereafter. They would have to be all-electric starting now.”

–Ralph Torrie, director of research, Corporate Knights

Total cost of ownership

According to a December 2020 study by Canadian fleet-tracking firm Geotab, nearly two-thirds of North American fleets would reduce their operating costs by swapping to EVs today. As with passenger vehicles, the up-front purchase cost of a battery electric delivery vehicle is higher, but the reduced operational costs lead to a break-even point after which the cost of running the EV is demonstrably lower over time.

Lion Electric, a medium- and heavy-duty EV manufacturer based in Saint-Jérôme, Quebec, offers battery electric Class 6 cargo, Class 8 cargo, Class 8 refuse and Class C, D and A school bus products. Although up-front costs for vehicles and charging stations can vary depending on the size of the fleet and existing infrastructure, the benefits already outweigh the drawbacks in today’s economics, and the situation only stands to improve, says Gary Lalonde, vice-president of truck sales for Lion Electric.

Lalonde says that fleet operators can expect to spend 80% to 90% less on electricity than on diesel fuel, depending on their location within Canada. Electric motors are also more reliable and require less upkeep, which he says means EVs have reduced maintenance costs thanks to the lack of oil changes, diesel exhaust fluid costs and overall downtime (time that trucks are not out doing deliveries because they’re having maintenance performed on them).

In comparing a Lion6 to a diesel-powered Class 6 truck, Lion Electric data shows a current total cost of ownership for the Lion6 that is 18% lower and begins to pay back over 7.7 years of ownership, while cost projections for 2024 see those figures improve to 41% and 3.3 years, respectively, as prices come down. This is based on an estimated useful life for each truck of 10 years, 52,000 miles driven annually and fuel consumption figures of 1.18 kWh per mile and maintenance costs of $0.16 for the Lion6 versus 7 miles per gallon, $0.40 per mile in the diesel equivalent.

More players accelerating EV uptake

Amazon, which is expected to account for 40% of the U.S.’s e-commerce sales by year-end, has contracted to receive 2,500 of Lion’s battery electric trucks by 2030. This is in addition to the 100,000 Rivian battery-electric delivery vans Amazon will receive beginning in 2021, most of which will be on the road by 2024. The shift to ZEVs is part of Amazon’s broader commitment to being carbon-neutral by 2040.

IKEA Canada is, indirectly, a Lion Electric customer. The home furnishing retailer has partnered with last-mile delivery provider Second Closet, which has ordered 15 Lion6 trucks. IKEA Canada announced in April its commitment to fulfilling 100% of its deliveries with zero emissions by 2025.

Purolator currently operates 323 hybrid-electric vehicles and has committed $1 billion toward reaching net-zero by 2050. The company says that residential deliveries have increased 50% during the pandemic and that it is piloting zero-emission low-speed electric delivery trucks and electric cargo bikes in Toronto and Montreal to help green last-mile deliveries. Those electric delivery vehicles are based on Ford’s F-59 platform and electrified by Motiv Power Systems.

This deployment marks California-based Motiv’s first collaboration with a company in Canada.

Ralph Torrie, director of research at Corporate Knights, says the time is now to convert all corporate fleets to zero-emission vehicles. “A company that is claiming it will have an all-electric fleet by 2050 is saying that they will be followers, not leaders, in the transition. A leadership position would require committing to being all-electric by 2030 or soon thereafter. To be nearly all-electric in 2030, they would have to be buying all-electric starting now.”

He adds that a commitment to electrifying sooner than later has another critical advantage: “It hedges against the real possibility that fossil fuel vehicles purchased now will indeed be stranded assets before they are fully depreciated, because of rising carbon prices that render their continued operation more expensive than their replacement with EVs.”

As more companies look at reducing emissions by converting their delivery fleets to electric, the lineup of product offerings is expanding in lockstep. For last-mile deliveries and all other vehicles, Torrie says, EVs are a clear winner: “It’s a bit like comparing a car to a horse.”

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

This story appears in Corporate Knights’ upcoming Summer Issue.

The post Prime time to electrify last-mile deliveries appeared first on Corporate Knights.

For a start, there still isn’t sufficient supply of EVs getting into Canada to meet consumer demand. According to a report prepared for Transport Canada by Montreal-based Dunsky Energy Consulting, just one in three Canadian car dealers had an electric vehicle in stock in the first half of February 2020 (before the pandemic prompted showrooms to close for two months). That figure fell to less than 20% outside of Quebec, B.C. and Ontario, with an average of two- to three-month wait times. “That means many Canadians struggle to find an EV to test drive, let alone buy,” Clean Energy Canada said in a statement.

For those who manage to find the EV of their choice, here’s the kicker: even with the rock-bottom borrowing rates being offered on conventional internal combustion engine (ICE) vehicles during the pandemic, the costs of both financing and leasing remain higher for EVs than for similar ICE vehicles, in some cases by as much as 3.5%. As a result, monthly payments and total cost of borrowing are disproportionately high. For consumers who are already cost-conscious in the current economic climate and find higher EV sticker prices a stretch, their higher leasing and financing rates are likely to be a deterrent.

Why are EVs being left out in the cold?

Since the era of Model Ts, banks have been offering loans for car purchases on the assumption that if the borrower couldn’t repay a loan, the bank could seize the car and sell it for a residual value.

The hitch for EVs is that there’s not a lot of historical data available to establish reliable residual values. That leaves banks working with worst-case scenarios for depreciation. While that means higher financing rates, EV leasing rates are most significantly impacted because of the need to estimate buyout rates.

Corporate Knights looked at the purchase price of the Nissan Leaf, Chevy Bolt and Hyundai Kona, factoring in each province’s available rebates and delivery charges, to examine the differences between leasing and financing rates offered for EVs and ICEs. The calculations are based on having no trade-in vehicle and making no down payment, which would be unusual, and some automakers would require the latter, but doing so equalizes the represented figures as much as possible. The rates shown are promotional and subject to a credit check, meaning they may not be available to every customer. Estimated lease buyouts are calculated based on a 24,000-kilometre annual allowance. These quotes were provided by real dealerships and don’t factor in any negotiating that customers might do.

Bolt best on financing

Through our research, we found that Nissan offered the most extreme example of financing disparity. With the Nissan Leaf Plus, financing rates across Canada were quoted at 3.9% as of late August for both 60- and 84-month terms. In Ontario, where the amount to be borrowed is highest, at $52,571, including taxes and the $5,000 federal iZEV rebate, this equates to a monthly cost of $716 over 84 months, with a total cost of borrowing of $7,587. Reduce that term to 60 months at the same rate and the cost to borrow naturally goes down to $5,377, with a higher monthly charge of $966.

By contrast, in late August it was possible to finance a Nissan Murano ICE SUV for a much more enticing 1.9% over 84 months and 0% over 60 months. Were those same rates available to a Leaf Plus buyer, the 84-month monthly payment would be nearly $50 less, at $669, and the cost of borrowing goes down by more than half, to $3,615. At the 60-month term, where 0% financing means there’s no cost to borrow at all, the monthly payment goes down by $90 to $876.

Hyundai wasn’t much better. While the automaker was offering 0% financing for up to 84 months on many ICE vehicles for much of the summer, the Kona EV rates were quoted at 2.79%. A customer financing a Kona EV in Ontario would borrow a total of $50,356.44 with sales taxes, resulting in a payment of $660.61 per month. This is $54 more than if that same customer opted for a Hyundai Santa Fe Luxury, a much larger gas-guzzling SUV that’s very close on price, at $50,949.44, but with cheaper monthly payments thanks to the 0% financing available over the same term.

If Hyundai’s EV and ICE rates were on par, the monthly payment for the EV would be reduced by $62 a month in Ontario and $52 a month in Quebec. In B.C., financing rates were slightly higher for the ICEs we looked at; at a rate of 1.49% over 84 months, the difference in the monthly payment is $27 per month, and the cost to borrow is reduced by nearly half.

In contrast, General Motors was running a promotional financing rate of 1.99% on 2020 Bolt EVs in August, which was more on par with the ICE.

For reference, Canada’s most popular EV, the Tesla Model 3, can be financed at around 2.15%, with a required down payment of $2,500 and a usual wait time of two to three months.

Leasing lead

For leasing, 48 months is a common term. Again, Nissan had significantly higher rates than GM for the EVs in our research, with the Leaf Plus at 4.9% (monthly cost of $716 and a total of $6,413 in interest paid). Contrast that with the 1.9% lease rate over the same term on a Nissan Murano; a Leaf Plus at that rate would cost $636 per month and only $2,461 in total interest.

At Hyundai, the gap in lease rates is in some cases greater than with the Nissan Leaf Plus, but the monthly rates remain lower because of the lower up-front cost of the vehicle. A customer leasing a Kona EV in Quebec would pay $560 a month over 48 months at 4.99% for a total interest payment of $5,036; if that same buyer opts for an ICE Santa Fe, the rate goes down to 1.49%. Had the Kona EV customer been given that rate, the monthly cost becomes $488 (a $72 savings), while the overall interest paid would be significantly lower, at $1,486.

As of August, Tesla is finally offering leasing options to Canadians, at least in Alberta, B.C., Ontario and Quebec. The Model 3 requires a $2,500 down payment and comes with a leasing rate of 3.85%, which is higher than similarly priced ICE competitors such as the Mercedes-Benz C-Class, offered at a lease rate of 2.99%.

Bridging the gap

Fitting monthly payments into customer budgets is key to closing deals. The current higher financing and leasing rates for EVs, the on-paper difference in monthly payments and overall cost of borrowing between EVs and ICEs is wide enough to turn away all but the most determined EV shopper.

How can we start to narrow that gap? A Corporate Knights Building Back Better report proposed a government-led system of guaranteeing EV auto loans over three years. Doing so could be just as critical as rebates to meeting Canada’s EV sales targets of 10% of light-duty vehicles per year by 2025, 30% by 2030, and 100% by 2040, by making it possible for Canadians to purchase or lease EVs with monthly payments that are on par with their ICE-driving counterparts.

Advocates say that if Canada also implements a zero-emission vehicle standard that requires a gradually rising percentage of vehicles sold to be zero-emission (as Quebec does), more Canadians could start driving away with EVs, all without being taken for a ride.

Stephanie Wallcraft is a multiple-award-winning automotive journalist based in Toronto and is the president of the Automobile Journalists Association of Canada (AJAC).

The post The electric car you can’t buy or lease appeared first on Corporate Knights.

Longer-range capabilities and the new federal incentive program, iZEV, are combining to make battery electric vehicles a more appealing and attainable option than ever. But if you’re looking for even more motivation to choose an EV, consider the lower total cost of ownership.

EVs don’t have oil to change or sparkplugs to replace, and that means fewer trips to the shop. According to current estimates, EV owners can expect to spend roughly a third less on maintenance over the life of their vehicles as compared to their internal combustion engine (ICE) equivalents.

Add in the fuel savings and the differences can be stark. Here, we’ve analyzed the popular Nissan Qashqai subcompact crossover against a similarly sized battery electric, the Kia Niro EV, and we’ve compared the Mercedes-Benz C-Class Sedan to the Tesla Model 3. As was the case when Corporate Knights conducted faceoffs with the Nissan Leaf, Chevy Bolt and Hyundai Kona Electric, the numbers show the benefits of choosing electrons over emissions.

Here’s an explanation of the figures we’ve used in this analysis:

• As of this writing, fuel prices are at historic lows due to the market forces at play during the COVID-19 pandemic. However, these prices are not expected to last. Since we’re assuming a 10-year period of ownership in our estimates, and prices over the past 10 years have swung anywhere from the current $0.75 to as much as $1.50 per litre in some markets, we’ve chosen a median average per-litre (L) cost of $1.25, understanding that this is the most volatile variable. For power rates, we’ve used a figure of $0.10 per kilowatt-hour (kWh). The published range and efficiency figures are as rated for each model by Natural Resources Canada (NRCan), (population-weighted average electricity bill per province, including taxes, assuming majority of charging occurs during off-peak hours).
• We’ve assumed the EV buyer would be a new owner, so we’ve factored in the purchase and installation cost for a Level 2 charger, using the total cost for a FLO Home unit of $1,745.
• We’ve made our calculations using the national average Canadian sales tax of 11.075%.

Kia Niro vs. Nissan Qashqai

Crossovers have become wildly popular with Canadians, and several EVs sporting this body style have hit the market to compete with mainstream equivalents.

One is the Kia Niro EV, the battery electric version of this subcompact crossover, which is also available in ICE and plug-in hybrid variants. The EV has an impressive 385-kilometre (km) range and comes in two models, or trims; here we examine the SX Touring trim, which is more expensive, at a manufacturer’s suggested retail price (MSRP) of $54,995 and a total cost of $55,929 with fees. Since the base model is priced under $50,000, this trim also qualifies for the iZEV program, and yet it adds features owners won’t want to live without, such as a heated steering wheel, front and rear heated seats, and a heat pump, which not only make it more suited to Canadian life but also make in-cabin comfort significantly more efficient (heated seats use less energy than cabin heaters and therefore less electricity, increasing the EV’s range). NRCan doesn’t account for these differences in efficiency in its ratings, which show the Niro EV averaging a combined 18.6 kWh/100 km.

Nissan’s subcompact Qashqai is a popular player in this growing segment. The SL Platinum grade carries an MSRP of $34,133 – slightly higher than advertised because there are no zero-cost paint colours – and a total of $36,213 with fees. This model matches the Niro EV SX Touring closely in features but offers one significant difference: it comes with all-wheel drive (AWD), which is desirable in winter driving and on imperfect roads but drives up its fuel use. According to NRCan, a Qashqai AWD averages 8.4 L/100 km combined, as opposed to the 8.2 L/100 km average seen in front-wheel-drive models.

We calculated based on both vehicles needing to be financed in full, less a $1,000 deposit, and used a 2.9% interest rate over a 72-month term, which are common numbers for each of these vehicles.
After running these through our estimator using the assumptions outlined above, the Niro EV ends its 10 years of ownership with a total cost of $86,264.50, which is $833.72 less than the Qashqai’s $87,098.21 – and all while producing 45.3 tonnes less in CO2 emissions over its life.

Tesla Model 3 vs. Mercedes-Benz C-Class

To look at this comparison fairly, we need to assess the Tesla Model 3 against the only four-door, non-performance variant of the Mercedes-Benz C-Class sold in Canada: the C-Class 300 4MATIC (AWD). This model has an MSRP of $46,400 and costs $48,575 after fees, and has a combined fuel efficiency rating of 9.4 L/100 km.

Longer-range models are available, and a lower-cost, “million-mile” battery has been announced that will debut in the Model 3 in China late this year or early next. For now, we presume for the purposes of this comparison that the buyer wants a Model 3 variant that qualifies for the iZEV program, making the best match the Standard Range Plus. This strikes a good balance between price and capability, with an estimated range of 402 km and an advertised price of $55,990, which includes destination charges and delivery fees. However, it comes equipped as rear-wheel drive only; to get the two-motor, AWD version, it’s necessary to pay $10,000 more for the Long Range model and give up the rebate, for a total hit of $15,000. The trade-off is in efficiency, which in the Standard Range Plus model is the best in the Model 3 lineup, at 14.9 kWh/100 km combined. This variant has heated 12-way front seats and includes the autopilot feature, but it doesn’t come equipped with self-driving features like autopark and summon, which are available only as a post-delivery, added-cost option.

We’ve also factored in a deposit of $5,000 since luxury brands typically request a down payment of 10%. In preparing this comparison, we found different interest rates on offer: Mercedes-Benz advertises a rate as low as 1.9% on the C-Class for qualified buyers, while Tesla’s website shows 4.6%.

Even in doing so, our model estimates the total cost of ownership for the Model 3 at $90,866.90 over 10 years versus $102,475.95 for the C-Class, for a savings of $11,609.06 over 10 years – and 50.9 tonnes less CO2 being pumped into the atmosphere.

According to a study cited recently by incoming Honda Canada president Jean Marc Leclerc, Canadians are currently willing to spend up to $700 more to buy EVs, which doesn’t cover the difference in production cost. Would more effective communication of the total cost of ownership, which clearly demonstrates savings of much more than $700 over the long-term, help car buyers mentally bridge the gap and tolerate higher up-front vehicle prices? Perhaps incorporating these figures into window stickers and engaging in education programs would help push electric vehicles into the consciousness of everyday consumers and bring this technology into the mainstream.

Stephanie Wallcraft is a multiple-award-winning automotive journalist based in Toronto and is the president of the Automobile Journalists Association of Canada (AJAC).

The post Assume EVs are pricier? Our latest showdown proves otherwise appeared first on Corporate Knights.

The first concern is easing as batteries gain capacity and efficiency. For the latest generation, range exceeds 200 kilometres and some claim more than 400.

Determining range is tricky enough, since it’s heavily impacted by driving style, load, terrain and temperature.

Cost calculations are even more complex. Common wisdom is that electric vehicles (EVs) are more expensive to buy than alternatives powered by internal combustion engines (ICEs), but cheaper to fuel and maintain. As a result, EV advocates argue, it’s only fair to calculate total costs over a vehicle’s lifetime.

But, as we shall see, that’s easier said than done.

Our aim here is to compare the total cost of ownership, or TCO, of Canada’s top-selling ICE vehicles with battery-powered alternatives of similar size, features and quality.

The category leaders are the Honda Civic sedan, Toyota RAV4 compact SUV, and, this country’s sales champion, Ford’s F-150 pickup truck.

To challenge the Civic, we chose the revamped Nissan Leaf S. Hyundai’s new Kona Electric takes on the RAV4. And, up against the F-150 is … well, nothing. At least, not yet. A few manufacturers are developing battery-powered pickups, but none will go on sale before the end of 2020 and their performance specifications remain sketchy.
TCO comparisons assume EVs have higher purchase or lease costs, including price, taxes and interest. Their fuel should be cheaper, in part because battery power is more efficient than internal combustion. With fewer lubricants and moving parts, and less wear on brakes, they ought to cost less to maintain – although experts disagree on how much less.

“Maintenance costs are largely unknown,” says Steve McCauley, senior director, policy, at environmental research and advocacy group Pollution Probe. “We’re still dealing with the first generation of EVs on the road.”

“It’s difficult to assign maintenance values because every person’s maintenance cycle is different based on frequency of use, road conditions in their area, weather conditions in their area, and so on,” says Brian Miller, communications co-ordinator at Plug’n Drive, a Toronto-based non-profit committed to accelerating the adoption of EVs.

But the deeper we dig, the more complex comparisons become.

Purchase price seems simple, except that while comparisons are usually based on suggested retail price, most manufacturers offer a wide range of discounts, which can even be influenced by a buyer’s bargaining skills. Interest rates vary from bank to bank and dealer to dealer, and with a buyer’s credit rating. Financing costs depend on those rates, as well as on how much the buyer borrows rather than pays in cash.

The cost of batteries – the main reason for EVs’ higher price – keeps falling. When the first Leaf hit the streets, it was about $1,000 per kilowatt-hour of capacity. It’s now around $200, and further drops will change the cost equation.

Fuel costs are, literally, all over the map. Gasoline prices vary from province to province, and can rise and fall dramatically. Electricity rates tend to be more stable but differ widely from place to place. In addition, most jurisdictions offer time-of-use rates, which generally mean you pay less if you consume electricity during off-peak times. One result is that per kilometre driven, electricity is occasionally more expensive than gasoline.

With all this in mind, we’ll plug some numbers into a TCO analysis worksheet – the most useful we found – developed by Tom Lombardo, a retired professor of engineering technology and now president of Tohoca, a communications company in Rockford, Illinois.

Here are our assumptions:

• We use each vehicle’s suggested retail price, for models that are usually a step up from basic. HST or its equivalent is set at 12%. We did not include delivery charges or other dealer fees or, for EVs, the cost of a battery charger.
• Calculations are based on manufacturers’ claims for range and Natural Resources Canada’s Fuel Consumption Guide.
• Each vehicle is driven 20,000 kilometres per year, the “rule of thumb” cited by Statistics Canada.
• The gasoline price is $1.20 per litre, roughly the current average in Canada’s largest markets. The electricity cost is 8.7 cents per kWh, the off-peak price in Ontario, based on the assumption that EV owners recharge their vehicles at home overnight.
• Based on data from Pollution Probe and Edmunds.com, a leading industry analyst, the lifetime maintenance and repair cost for an EV is about 75% that of an internal-combustion vehicle. We used $100 per month as an average for the ICE, based on data from Canada Drives.
• Repair and insurance costs are about equal.
• The ICE buyer pays all cash. The EV buyer pays the same amount in cash and borrows the cost difference at 4.5% interest, with a 72-month term – the length most Canadian buyers now use, according to various sources.
• Each vehicle is kept for 10 years, so depreciation is 100%.
• We do not include EV subsidies, now available only in Quebec, up to $8,000, and British Columbia, up to $5,000.

Given our inputs, we found the $23,770 Civic LX with automatic transmission would cost $66,020 over 10 years. The Leaf S sticker price $36,798, would cost $63,816 over that same period.

The 10-year TCO for the $33,690 RAV4 XLE with front-wheel drive would be $78,373. The $45,599 Kona Electric “Preferred” would cost $73,388.

So, the EVs win in these categories. But TCO comparisons are meaningful only with specific local numbers.

For example, electricity costs nearly 17 cents per kWh in Halifax, where the Leaf’s ownership cost rises to $65,555 and the Kona’s price climbs to $75,004. Since Halifax’s gasoline price is close to our assumption, the Civic and RAV4 retain almost the same costs.

In New York City, where electricity runs 31 cents (Canadian) per kWh while gasoline is just 84 cents per litre, EVs lose in the comparison. But in Norway, where electricity rates are in the same ballpark as Canada’s but gasoline costs twice as much, EVs win hands down.

No battery-powered pickup trucks are ready for comparison, and it’s uncertain which will make it to market. The list includes the Havelaar Bison, planned for Ontario, and two U.S. models, the Bollinger B2 and Rivian R1T. Tesla promises one, but with no firm timetable.

All claim impressive range, payload and towing capacity, but none has performed in the real world nor revealed how large loads and rugged conditions would impact their range – a crucial consideration for working trucks.

The Rivian R1T, backed by a recent US$700 million investment by Amazon.com, seems furthest ahead. With the biggest battery available, Rivian says its range will top 600 kilometres. But the price in the U.S. will start at about C$94,000, and that’s for a base version with only 370 kilometres of range, making it more than double the price of a similar F-150.

Our conclusion: It’s clear that EVs are more expensive to buy or lease, and whether they overcome that handicap with lower operating costs depends heavily on fuel and power prices where you live.

As battery costs fall, the price gap will shrink, making it more likely that EVs will win any cost comparison, just as they already beat ICEs on environmental impacts.

Peter Gorrie is a Victoria-based freelance writer and editor who has covered environmental issues for more than 30 years.

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