Should Canadian Dealerships Be Thinking Electric?

By Canada Drives Newsroom | Dealer Services

It should come as no shock that the future of the automotive industry is electric. The current market share of electric vehicles (EVs) is just 1.89%, but with every technological milestone and government incentive, the general feeling is that electric vehicles are the future and gas-powered vehicles are on the way out. The question is: when?

Automakers across the globe have already spent $90 billion (U.S.) on developing electric cars and the technology to support them. When Ford CEO said, “We’re all in,” on EVs, he wasn’t alone in staking that claim.

Volkswagen is committed to putting the most money down with a whopping $40 billion (U.S.) investment by 2030 to build electric versions of every model in its lineup.

Crunching the numbers

In Canada, provincial rebates appear to be the most significant factor in spurring sales spikes or dips. EV sales topped the 100,000 mark across the country as of March 2019. However, sales didn’t rise in all provinces. 

From Q1 2018 to Q1 2019, Ontario saw a 55% decrease in EV sales due to the new provincial government cancelling its incentivized program that offered up to $14,000 in rebates. That cost-cutting decision is the primary reason EV sales fell nationally.

Electric Vehicle Sales by province, image credit Electric Mobility Canada's Q1 2019 Sales Report

Graph Credit: Electric Mobility Canada’s Q1 2019 Sales Report

B.C. and Quebec fared far better than Ontario, with 100% and 56% growth over the same period. It’s also worth noting that those two provinces remain the only ones currently offering a provincial subsidy to help consumers buy an EV.

Despite the seesaw results, Electric Mobility Canada believes the total number will double to 200,000 EVs by 2022, in spite of it taking 10 years to hit the 100,000 mark. The federal government may help meet that projection if its own rebate program bears fruit. Starting in May, Ottawa started cutting cheques for $5,000 for any EV under $55,000, and $2,500 for any plug-in hybrid under the same ceiling.

That covers about nine EVs, including the Chevrolet Bolt, Nissan Leaf, and Tesla Model 3 among others. The incentives play into the government’s March 2019 budget that aimed to increase EV sales to 10% of all vehicles sold by 2025. The ambitious goal is to continue the increase to 30% by 2030 and 100% by 2040.

Making the case

One of the biggest challenges in both selling and driving an EV is range anxiety, as in how far the car’s battery can take the car before needing a recharge. The last 10 years have seen a gradual, yet precipitous, move forward toward efficiency. As an example, the original Nissan Leaf ran on a 24kWh battery, while the current model is on 60kWh. That translates to a range of up to 363km on a single charge.

Nissan Leaf, photo credit Nissan.

The Nissan Leaf is the world’s best-selling EV with over 400,000 sales worldwide (Photo Credit: Nissan)

And that’s on the lower end of the spectrum for EVs. 

The Tesla Model 3 can already surpass 500km, while the Hyundai Kona electric can go up to 449km.

But how much does all that electricity cost compared to gas?

BC Hydro compared the electricity costs for some typical commutes in British Columbia. And while the selling price of electric vehicles is generally higher than a gas-powered vehicle, the running cost savings are revelatory: 

City

Electricity Costs Per Year (Nissan Leaf)

Gas Costs Per Year (Honda Civic)

Richmond

$144.43

$965.33

Surrey

$263.38

$1,718.64

Coquitlam

$339.84

$2,110.08

Abbotsford

$603.22

$3,268.27

Leading the charge

Then there’s the question of how and where to charge the vehicle. Drivers tend to see more gas stations on the side of the road than electric charging stations. This lack of visibility is surely a point of concern for potential buyers who don’t want to be too inconvenienced when their battery dwindles.

But progress in this area also seems to be coming on in leaps and bounds.

Canada already has an extensive network of roadside chargers, and the first public electric charging stations are also on the way with Electrify Canada spearheading the effort.

And at home, consumers can now buy home charging stations at a local hardware store, and any certified electrician can install the Level 2 requirements. For example, an electrician could convert a power outlet in the garage to output 240V/30 Amps. An hour-long charge with that amperage would amount to about 30km in range.

What about self-driving cars?

Among casual car buyers, electric car technology seems to go hand-in-hand with self-driving technology. How’s progress looking on that front?

Like hybrid vehicles, there are already a few vehicles that have semi-autonomous driving modes where they’re essentially driving themselves. However, full autonomy—where the car requires no input from a human driver—looks to be some years away.

There is no shortage of conceptual and experimental vehicles that make headlines (sometimes for the wrong reasons), but these are largely research prototypes to improve the machine learning technology. For a self-driving car to be effective, it has to know its own position relative to everything around it, be it civil infrastructure, other vehicles, and pedestrians, for example.

By the time these vehicles achieve what is considered Level 5 autonomy (requiring no human input), EV sales will likely be much higher than they are now.

Sitting on the fence between gas and electric

Besides the feel-good vibes of doing your part for the environment, rebate programs are currently the biggest incentive to buying an electric vehicle. But besides the rebates offsetting high-cost prices, running cost savings, charging considerations, and autonomous features, some other questions need to be answered for Canadian car buyers:

  • How well will it hold up in a Canadian winter? 
  • Will the battery degrade over time?
  • What do maintenance costs look like?
  • What about SUV, trucks, and family-size vehicles?

Durability, size, and variety clearly matter in the True North, and the current lack of available options may keep electric vehicles out of Canadian mainstream contention...for now.

In the meantime, car dealers could benefit from keeping their ear to the ground. If government rebates continue to incentivize the buying public, EV power efficiency continues to climb, and the right answers are provided to the questions above, dealers that aren't ready to meet customer demand will lose out. Beyond educating sales staff on all things electric, dealerships should be ready to accommodate interested car buyers.

The future might seem decades away. But like all other technology, electric vehicle tech moves faster than it seems, and government and industry will continue to spur it along.

Canada Drives is the nation’s premier lead generation company. With our sales-savvy methods and digital know-how, we deliver steady lead flow to hundreds of certified dealerships nationwide. And we’re always looking to expand our network!

Reach out and speak with one of our regional sales managers. A consistent stream of high-intent car buyers is just a phone call away.




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