The expansion of Canada’s electric vehicle (EV) industry is fueling a growing number of Canadians to switch to electric vehicles in a bid to trim down fuel and insurance expenses. As always, the overall expenditure depends on various factors, such as usage, choice of vehicle, and charging location.
One key variable to consider is insurance. As with traditional gas-run vehicles, insurance rates for electric vehicles vary, depending on the driver’s historic record, geographical location, age, and choice between a luxury and a standard vehicle model. Due to these factors, insurance for EVs could potentially save you a few dollars.
A 2022 study by auto insurance firm Ratesdotca reveals that a 35-year-old male, based in Toronto, Ont., owning an electric vehicle with a spotless driving track record could save on insurance premiums compared to a gasoline-powered vehicle. For instance, insuring a 2017 Tesla Model S, the priciest EV, would cost approximately $200.42 per month. Meanwhile, a 2019 Kia Niro, positioned at the lower end of the EV spectrum, averages around $165.92 monthly. By comparison, insuring a 2022 BMW M340i, the most expensive gasoline vehicle, averages around $231.75 per month.
Qui Trieu, AVP National Underwriting for Aviva Canada, highlighted that while EVs potentially offer savings, other aspects such as part replacements can impinge upon insurance premiums and overall costs. In case of accidents, if the EV’s battery sustains serious damage, it could result in a significant expense if not covered by insurance. Trieu also mentioned that the industry’s growth would improve access to critical parts.
He also explained that EVs, being relatively new, pose challenges to both the industry and customers concerning vehicle supply and skilled labor. As EVs are constructed differently from traditional vehicles, they may be costlier to repair, thereby affecting premiums.
Despite some benefits with fuel costs and insurance premiums, the overall cost of electric vehicles is noticeably higher compared to gas-powered counterparts. The Canadian Automobile Association reports that 2022 and 2024 electric vehicle models range between $38,198 to $212,500.
The Canadian federal government is aiding this transition by offering a $5,000 purchase incentive for vehicles with an electric range of over 50 kilometres and a $2,500 incentive for vehicles with a range of under 50 kilometers. Additional incentives and discounts are also provided by provinces and insurance companies.
With gasoline prices surging recently, EV owners can save significantly on fuel costs over time by charging their vehicles at home or nearby charging stations. The charging cost, however, depends on the size of the vehicle and the distance driven. For instance, the 2023 Fuel Consumption Guide of Canada states that a Tesla Model S owner’s annual charging cost stands at $525, compared to a Honda Civic, for which the yearly fuel cost can reach up to $1,775.
Brian Kingston, President of the Canadian Vehicle Manufacturers’ Association, believes that Canadians contemplating an EV switch would find the potential savings appealing. However, the shortage of charging stations remains a formidable barrier to switching. Kingston emphasized the importance of assessing charging accessibility at home, the workplace, or nearby charging stations before purchasing an EV.
He also urged Canadians to evaluate their driving habits, such as the frequency and distance of their drives, to decide whether an electric vehicle suits their needs. “It’s not unusual for someone to drive 800 kilometers over a weekend to visit family or move across the province. If this is a regular occurrence, it’s critical to ensure access to charging infrastructure,” he said.
