The potential for electric vehicles (EVs) to revolutionize Canada’s car market continues to rise but reaching that potential is not without challenges. Aided by an increasing shift towards the manufacture of electric SUVs, trucks, and large cars, the worth of the EV market is appreciating, a development that ironically poses a threat to consumers and to the environment.
Booming business for the automakers indeed, but this tilt towards the larger end of the vehicle spectrum consequently soars EV prices. According to data from Canadian Black Book, average pricing for an EV is nearing $73,000, rendering this green vehicle alternative unreachable for most consumers. Tesla’s attempts at price reduction are, at best, a drop in an ocean.
For Canada to successfully shift away from internal combustion engines, it is imperative that affordable EVs become more available. One possible solution could be the imminent rise of Chinese automakers, who, if uncontested, could dominate this emerging market.
Scotiabank’s head of resilience economics, Rebekah Young, mentions the urgent need to find ways to produce budget-friendly vehicles. However, Young warns that lower EV prices won’t come without difficulty: automakers grapple with increasing costs on materials, labor, and the substantial preparatory work needed to transition to electric vehicles.
As various issues associated with supply chains force automakers to concentrate on larger vehicles, customers wind up dealing with even fewer choices. The International Energy Agency notes that while the total number of EV models has risen significantly since 2018, the number of small car options has, in fact, declined.
It is a concern for the IEA that SUVs and large models maintain such a sweeping dominance as it could hinder efforts to move away from fossil fuels. While automakers posit that luxury vehicles help cement funds for the future transition towards cheaper models, they are faced with a ticking clock. Chinese manufacturers are demonstrating formidable competitiveness, showcasing impressively affordable vehicles and moving beyond their domestic markets.
This growing influx of low-cost Chinese vehicles could help Canada to meet its EV targets, but at the potential loss of domestic production benefits. The global EV sales competition between BYD and Tesla is a clear illustration of the limited time traditional manufacturers have to respond.
While Tesla promised a significantly cheaper EV in the $25,000 range, it remains to be seen. Traditional automakers like General Motors continue to send mixed signals in regard to inexpensive vehicles. Rising prices for petrol-driven vehicles have started closing the gap with EVs, yet according to industry experts, the need for affordable entry-level electric cars is of utmost importance.
Still, disparity in prices is not the only obstacle. Supply shortages, extensive wait times, misconceptions about charging needs, and range are widespread deterrents. An upcoming survey from Electric Mobility Canada reveals, for example, that most Canadians are unaware of the federal rebates on EVs. As such, significant and continuous education, according to experts, remains the key to the quest for universal EV adoption.