Car companies are going to have to win drivers over to cleaner vehicles the old fashioned way, by delivering cheaper, more efficient cars, SUVs and pickup trucks.
The Electric Vehicle Availability Standard, announced Tuesday by Environment Minister Steven Guilbeault, is a zero-emissions vehicle (ZEV) sales mandate by another name. It challenges car companies to deliver greater numbers of mainstream electrified vehicles that consumers will actually want – and be financially able – to buy, and also to build more public-charging stations while they’re at it. That, most drivers should agree, is a good thing.
In an electric-vehicle market increasingly saturated with high-end luxury machines, high-priced SUVs, not to mention the inane Tesla Cypertruck, where consumers face high interest rates and long wait times for popular new models, this ZEV mandate is necessary to refocus the auto industry on mass-market adoption.
The new standard, released in draft form last year, was a policy plank in the Liberals’ campaign platform. It isn’t catching anyone in the auto industry by surprise.
The basic idea is that car companies must sell an increasing percentage of new zero-emission vehicles (ZEVs), which can be either hydrogen, plug-in hybrid or fully electric vehicles. The sales targets start at 20 per cent in 2026 and ratchet up to 60 per cent in 2030 and 100 per cent in 2035. Those are similar to targets in California, Quebec, B.C. and a growing number of U.S. states.
So, no, Prime Minister Justin Trudeau is not forcing everyone to buy an EV, nor is the government banning gas-burning cars by 2035.
“This [2035 target] is in line with the recommendations of the International Energy Agency, so it’s not just some moonshot,” said Katya Rhodes, an assistant professor at the University of Victoria, who specializes in emissions-reducing climate policy. Recent projections from S&P Global predict that by 2025, ZEVs will account for 25 per cent of the Canadian market, exceeding the federal target of 20 per cent by 2026.
“Car manufacturers are now strongly incentivized through penalties, and through these mandated targets, to innovate and reduce EV prices,” Rhodes said.
The most interesting part of the policy (or problem, the industry would say) is that it puts the ball firmly in the automakers’ court. The federal government isn’t increasing consumer rebates (currently $5,000 on eligible ZEVs) or adding more charging stations than they’ve already committed to. Taxpayers have done enough.
Car companies will have to entice drivers with cheaper, more readily available ZEVs that are so much better than cars with only a gas engine, the choice will be easy.
Announcing the new policy, Guilbeault said “almost all industry projections show that by the end of the decade, at the latest, the purchase price of gas-powered and electric cars will be about the same.” At a time when the average new vehicle sold in Canada costs more than $50,000, that seems reasonable.
So, to say cheaper ZEVs are an impossibility isn’t true. Battery breakthroughs, such as the solid-state technology several automakers are planning to launch later this decade, have the potential to dramatically reduce EV costs.
Another way to bring down prices would be for car companies to finally reverse the trend toward ever-larger vehicles stuffed with less-than-useful gadgets. Electric sedans, for example, require fewer, and therefore less costly batteries than electric SUVs to go the same distance, and smaller SUVs are more efficient than the bigger ones.
Tesla is already working on a small new US$25,000 model and in March Volkswagen first showed the ID. 2all EV concept. The German maker says the production version will launch in 2026 with a range of 450 kilometres and a price of less than €25,000 (about $36,000), which is far less than the price of the average new vehicle sold in Canada. The ZEV mandate incentivizes companies to prioritize stocking Canadian showrooms with new models like those.
Car companies could also subsidize cheaper ZEVs themselves by putting a markup on bigger, more luxurious vehicles that can bear it. (That hulking Cadillac SUV could make your next compact Chevrolet Bolt EV cheaper, although car companies would never admit to doing it.)
The same goes for chargers. The two main automaker lobby groups in Canada have criticized the policy for lacking a plan to build much-needed public-charging infrastructure on the immense scale required. The answer is that automakers will have to build it in order to sell EVs, as Tesla did. Either that or the private sector will have to step up, which should be easier now because the size of the ZEV market is effectively guaranteed. Besides, with nearly all major automakers switching to Tesla-style charging plugs, every EV should soon have access to Tesla’s coveted Supercharger network, which makes new infrastructure requirements slightly less daunting. (If you can’t beat ‘em, join ‘em.)
There are, however, many obstacles and challenges the new Electric Vehicle Availability Standard doesn’t address. Some of the big challenges require provinces and municipalities to take action, such as the need to upgrade electricity grids, retrofit existing condos with EV chargers and allow for on-street charging. Remote communities will certainly need additional financial support from governments to build more charging infrastructure. Existing ZEV rebate rules (but not amounts) may need tweaking to better protect Canadian workers. And, Ottawa has offered little real help to low-income Canadians, many of whom already struggle to get around, underserved by public transit and priced out of the car market.
There’s also the bigger problem of a long-term policy like this, which is that governments change. If a future, non-Liberal government dismantled the policy it would ultimately hurt Canadian industry and consumers.
The road ahead will be bumpy and progress uneven. Nobody’s saying it’s easy, but switching to cleaner cars on this timeline is possible and necessary in order to meet climate targets. It’s not as if automakers have to do this overnight. They’ve known this was coming, and the targets increase over 12 years, giving both consumers and industry time to adapt. And, speaking as a driver, I’m looking forward to seeing all the more affordable, more compelling hydrogen, hybrid and electric vehicles the industry can deliver.
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