Market Snapshot: Growing electric vehicle incentives in Canada

Release date: 2018-01-17

Canada has a small but growing fleet of electric vehicles (EVs). EV sales are accelerating, but account for less than 1% of car sales in Canada. Various policies and incentives, lower vehicle prices, increased driving range, and faster charging times are encouraging people to buy EVs.

Subsidies and incentives

Through its Transportation Electrification Action Plan, aiming at electrifying the transportation system, the government of Quebec offers a discount up to $8 000 for each individual electric vehicle sold. Similarly, Ontario offers rebates between $3 000 and $14 000 for various types and sizes of electric vehicles under its Electric Vehicles Incentive Program. British Columbia also has its own Clean Energy Vehicle Program that offers incentives varying from $2 500 to $5 000.

Many other benefits have been implemented throughout the country as part of these programs. One benefit is privileged parking lots in strategic locations like bus terminals and shopping malls. Another is the ability to drive in reserved lanes. For example, since 2014 EVs can use the reserved lane of the Robert-Bourassa Highway in Québec city, no matter how many passengers are on board. At least 10 highways offer similar benefits to EVs in that province. Combined, these policies and incentives are intended to make EVs more attractive to the consumer. An exhaustive list of the initiatives taken by the government of Quebec can be found here.

A graph shows the driving range in kilometers and car price for 2017 North American EVs compared to the Toyota Corolla
Source and Description

Source: U.S. Department of Energy

Description: This graph shows the driving range in kilometers and car price for 2017 North American EVs compared to the Toyota Corolla. EVs from the car manufacturer Tesla are shown in blue, other EVs are in grey and the Toyota Corolla is in orange. Prices vary from $20 590 to $135 550. The ranges vary from 95km to 658km.

Vehicle price

Prices are decreasing sharply for EVs. Although Tesla has so far dominated the market with vehicles costing in excess of $60 000, less expensive new electric models are gradually becoming available, many of them in the $20 000-$40 000 price range.

Vehicle range

The range, or furthest distance an EV can travel without charging, continues to be a concern. For contrast, the Toyota Corolla, one of the top selling internal combustion engine vehicles in Canada, travels approximately 640 km between fill ups. This is about 19% further than the highest range EV, whose maximal range is 540 km. Range anxiety, the fear of a battery discharging before reaching the driver’s destination, is one of the major barriers to large scale adoption of EVs. The range of electric vehicles has been increasing sharply in the last few years.

Fuel price

Fuel price is a factor for consumers when comparing EVs to traditional internal combustion engines. Electric vehicles are more efficient, so price is an advantage, especially in regions where the price of electricity is low as in Quebec and Manitoba.

Charging time

Electric vehicles still face battery-related challenges such as considerable battery cost, decreasing electricity storage capacity over time and charging time. Fully recharging a battery can take from 4 to 8 hours with basic charging stations. Conversely, DC Fast Charging stations take around 30 minutes for an 80% charge. Fast technological advancements are likely to lessen these impacts.

Electric vehicles are a very small part of the fleet in Canada, but their market share is growing quickly and steadily. Range and price have an important impact on this market, but other factors such as public policies, incentives and future oil prices will also play a major role in determining the speed of growth of the electric vehicle market in Canada.

 

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