​Should Ottawa be driving electric-vehicle adoption?

Debate sparked over further government intrusion in auto sales marketplace

If you live in Vancouver, Toronto or Montreal in a single-family home and do most of your driving in the city, you may find it easy to consider all-electric or hybrid electric for your next car.

The government will even help you buy one with a $5,000 rebate, and you can save an average of $1,087 to $1,266 a year in fuel costs, according to one recent calculation.

But if you live on the first floor of a multi-unit heritage home in the Strathcona district of Vancouver and park on the street, it may not be an option, unless you work for a company like MEC, which provides charging stations for employees.

And if you live in Dawson Creek and must drive 50 kilometres to work in the gas fields in the winter, or own a farm in North Battlefield, Saskatchewan, it’s really not an option.

The fact is, Canada is cold and vast, and electric vehicles (EVs) lose range in freezing temperatures, partly because efficiency drops and partly because additional power is needed to heat the car.

So while it makes sense in big cities, especially in provinces with clean and relatively cheap hydro power – B.C. and Quebec, for instance – it makes less sense to buy an electric vehicle in more remote and frigid parts of the country.

Which is why Blair Qualey, president of the New Car Dealers Association of BC, thinks the push for a national zero-emission vehicle (ZEV) mandate is a bad idea.

The federal government is working on a ZEV strategy, to be rolled out in 2018. A national mandate is one of the policies a Clean Energy Canada report, Stuck in Neutral, is recommending Ottawa adopt as part of the strategy.

Such a policy – already in place in California and coming soon to Quebec – would require manufacturers and auto dealers to ensure that zero-emission vehicles represent a certain percentage of their available stock.

Despite subsidies in B.C., Quebec and Ontario that encourage drivers to buy electric vehicles, the number of EVs on the road in Canada is still just 0.6%, according to the recent Clean Energy Canada report.

B.C.’s EV adoption rate for passenger vehicles is higher than the national average of 1.4% as of 2016, according to the Insurance Corp. of British Columbia (ICBC), although that number would be lower if commercial vehicles were included in the comparison. (ICBC reports both passenger and commercial vehicles sales, but does not break down EV sales by passenger or commercial categories.)

In March 2017, hybrids and battery electric vehicle sales in B.C. hit 4% of total car sales, according to EV tech company FleetCarma.

“If current trends continue we can predict both British Columbia and Quebec EV sales to surpass 5% of the total passenger vehicle market,” FleetCarma stated.

That’s insignificant compared with Norway, which has a 28% adoption rate. Then again, every country in the world is a laggard compared with Norway, which essentially made EVs tax-free – a significant incentive in a country that has a 25% value-added tax.

Even Germany, the fourth-largest auto producer in the world, and one of Europe’s most aggressive adopters of clean energy, has an adoption rate of just 0.7%. In the U.S. it’s 0.9%, with California accounting for the lion’s share.

In recent years, more public charging stations have been built in urban centres in B.C. Subsidies are available and there are new makes and models of EVs being rolled out every year.

But many dealers don’t stock them in their lots, so would-be buyers can’t even take them for a test drive and must often wait months for their new cars to arrive.

“There’s been a reticence amongst dealers to have electric cars on their lots, for a few reasons,” said Dan Woynillowicz, policy director for Clean Energy Canada.

As Woynillowicz points out, service and maintenance are a big part of a car dealer’s business, whereas electric vehicles require little maintenance.

“So for a dealership, selling an electric car and then doing the servicing for it doesn’t carry the same value proposition as selling a gasoline car,” Woynillowicz said. “So I think those factors are conspiring to make it difficult for those Canadians that want electric vehicles to go to a number of different car dealerships with different brands and offerings.”

Clean Energy Canada is therefore recommending the establishment of electric-vehicle discovery centres, which would have a range of makes and models available for people to test drive.

But it is also recommending that Ottawa implement a national ZEV mandate that would essentially require dealers across Canada to stock and try to sell more EVs.

“That mandate approach has proven very effective in California,” Woynillowicz said.

Qualey said such a policy might result in dealers being forced to showcase cars that they may not be able to sell. Dealers have to pay the freight on all the cars they bring in, and every car that sits unsold in a showroom is displacing a car that could be sold, which is not good for business.

“We don’t have a supply problem,” Qualey insists. “We have a demand problem.”

If the federal government wants to boost EV adoption, he said, it should invest in more charging stations across Canada, since a lack of rapid charging outside of urban centres is one of the obstacles to wider adoption.

“If the infrastructure isn’t where people conduct their lives and where they need to charge, then we’re never going to have uptake in these vehicles, because everybody’s going to be scared that they’re going to be trapped on the side of the east-west connector,” Qualey said.

“We need to educate consumers and improve the infrastructure. And if we do those two things, the market will look after everything else.”

B.C. is one of only three provinces that offer EV subsidies. It provides rebates of up to $5,000 to cover the cost of a new battery electric car, or $2,500 for a hybrid electric.

While power utilities have an obvious vested interest in promoting EV adoption, some of the barriers to adoption in B.C. may be BC Hydro policies.

Its two-tiered system for power rates, in which above-average electricity use bumps customers into a higher bracket with higher power rates, may be a disincentive, since it erodes the savings an EV owner might otherwise enjoy.

Also, since BC Hydro has a monopoly on power sales, there is no incentive for the private sector to invest in for-profit power stations.

“Only BC Hydro is permitted to sell electricity, so somebody who wants to operate a charging station can’t actually charge a consumer for the electricity,” Woynillowicz said.

With Site C dam expected to begin producing a surplus of power in 2024, he said policy changes would be in everyone’s interest.

“There needs to be a realignment of climate change policies, energy policy and the way BC Hydro operates.”

— Business in Vancouver