Market forces will help drive the transition to electric vehicles, but government sales mandates are distorting the sales picture, according to an Automotive News Canada Congress Conversations panel.
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EVs still make up only a small fraction of total passenger vehicle sales in Canada but they’re already influencing operations at many dealerships.
Kevin Zimic, dealer principal at Ridgehill Ford Sales in Cambridge, Ont., said the market will dictate the mix of vehicles and powertrains on Canadian roads — battery electric, hydrogen fuel cell, hybrid and, yes, internal combustion.
“So, we're going to have to learn as retailers how we're going to manage that based on what our customers need and what would best service them,” Zimic told the panel moderated by Automotive News Canada Publisher Tim Dimopoulos. “I personally believe that it's going to alter quite dramatically what our current circumstances are.”
Expect to see a rapid proliferation of EV models in every segment, said Hugo Jeanson, co-owner and general manager of Bourgeois Chevrolet Buick GMC, in Rawdon, Que., northeast of Montreal, where EVs account for up to half the store’s annual sales.
More choice in the popular SUV and pickup truck segments will boost the overall percentage of EVs in the national fleet, he said.
The federal, Quebec and B.C. governments offer cash rebates to defray the still high cost of EVs. The two provinces have also legislated zero-emission-vehicle (ZEV) sales targets. That has influenced how manufacturers direct their still limited EV production, the panel heard.
With those two provinces receiving up to 90 per cent of EV allocations, Zimic said there was “no question” that dealers in other provinces would sell more if they got more inventory
The vast majority of more than 400 Ford dealers in Canada are certified to sell and service EVs, he said. But the fact manufacturers are obliged to provide the most allocation to B.C. and Quebec is a significant limitation to dealers in other provinces.
The distortion created by ZEV mandates could only get worse with the introduction of potential high-volume models such as Ford’s F-150 Lightning. It could account for as much as 50 per cent of demand, Zimic said.
“Obviously there's going to be change to that allocation model,” said Zimic. “Preliminary discussions with my OEM have said that the allocations would be run on a similar turn-and-earn basis in which we have currently with the [internal combustion] SUVs and F-150s.”
Even for Jeanson, demand exceeds supply, with EV models like the Chevrolet Bolt pre-sold before it hits the lot, he said.
Larry Hutchinson, Toyota Canada CEO, said cost and range anxiety are among the biggest barriers to more widespread EV adoption.
“Currently there’s still a little bit of a fundamental disconnect between that front end consumer demand or aspirational -- what the government's trying to do -- which is positive and that cost issue … but they have to enable the consumer through their incentives somehow to bridge those gaps for some initial introduction.”
