For ZEV adoption, Canada is a country of contrasts

The state of the evolving electric-vehicle market in Canada is a tale of two extremes; it’s either wonderful or awful, depending on where in the country the story is unfolding.

In Quebec, there are significant consumer rebates and a government zero-emission vehicle sales mandate has been in place since 2018. As a result, Bourgeois Chevrolet-Buick-GMC in Rawdon, about 80 kilometres north of Montreal, can’t keep EVs in stock, said Sales Consultant Hugo Jeanson.

But in Alberta, with no provincial rebates and no ZEV sales mandate, McManes Automotive Group President Jim McManes has a surplus of EVs sitting on the lots. McManes has 18 franchised dealerships in Western Canada.

In 2022, Quebec had 13.2 per cent of national ZEV registrations, according to auto analyst S&P Global Mobility. Alberta, with about half the population, accounted for 3.5 per cent.

Consumers in McManes’ part of the country are spooked by the dearth of charging stations and the high cost of EVs, he said.

The average price of a gasoline-powered compact utility vehicle before any incentive is $43,000, compared with $62,000 for a compact electric utility vehicle, said Robert Karwel, senior manager of the Canadian automotive practice at J.D. Power.

“We’re a huge truck market in Western Canada, and a lot of my customers don’t want an electric vehicle until the technology is way better, and they have range and towing power,” McManes said.

LED BY GOVERNMENT

But in Quebec, which offers consumer rebates of up to $7,000 per qualifying vehicle, on top of the federal rebate of up to $5,000, Jeanson said he has had “zero inventory” for the past two to three years. There’s a 1,500-person waiting list for the new electric 2024 Chevrolet Equinox crossover, slated to go into production next year, he said.

“We’ve been taking orders for the past few years, so I would say it’s a five-year wait to get one.”

Across the country, registrations of ZEVs declined in the first quarter of 2023 compared with the final three months of 2022.

ZEV registrations totaled 30,533 from January through March, accounting for 8.6 per cent of all Canadian vehicles registered, according to data from Statistics Canada published Aug. 2. This compares with 33,399 ZEV registrations for the fourth quarter of 2022, which equated to 9.6 per cent of vehicle registrations. Second-quarter numbers are not yet available.

For used EVs and plug-in hybrids, there was a 44-day supply of EVs and hybrid plug-ins on lots in June. The optimal supply is about 60 days, said Daniel Ross, senior manager of industry, insights and residual-value strategy at Canadian Black Book. By comparison, there was a 46-day supply of internal-combustion-engine (ICE) vehicles on used-vehicle lots, Ross said.

Canadian Black Book does not track days supply for new vehicles, so those figures aren’t available for Canada. In the United States, the supply for EVs reached a high of about 90 days in June, according to figures by Cox Automotive.

“A 60-day supply has been the statistical average of good vehicle inventory turnover, so when you’re below that, it’s because you have a lack of inventory,” Ross said.

Charles Bernard, lead economist at the Canadian Automobile Dealers Association (CADA), said EV supply is outpacing demand, which is complicated by government sales mandates that force automakers to sell more EVs while insufficient charging infrastructure remains a critical obstacle for buyers. Quebec and British Columbia have ZEV mandates in place and lead the country in per-capita adoption. A pending federal-government mandate requires 20 per cent ZEV sales by 2026.

“The main people who buy [pickups], they’re not people in Montreal,” Bernard said. “They’re people in Red Deer [Alta.] and the rural parts of the country, and that’s where the infrastructure is lacking.”

Ford has lowered the price of the F-150 Lightning pickup, but that hasn’t ignited sales, Bernard said.

“For the moment last year, they were the hottest thing on the market, and now they’re having a hard time getting those vehicles off the lot.”

‘NEVER MOVES’ OFF LOT

McManes said his stock of EVs — especially the luxury models and pickups — is sitting on the lot.

“It never moves, and [automakers] are spending all this money on EVs,” he said. “The Lightning truck is incredibly expensive — and I’m talking Western Canada; I’m talking farmers, oil rig people. They don’t want this truck. ... There’s no place to plug it in, and we can’t sell them.”

Automakers, McManes said, are out of step with consumers. “That’s a dangerous game to play, and they’re all spending $40, $50 billion on full electrification that people can’t afford.”

McManes is concerned “about where this industry is going. I’m in business to make money; I’m in business to look after my customers and work well with my manufacturers. But when I’ve got a bunch of electric vehicles on my lot that nobody wants to buy, I’m really concerned.”

CADA’s Bernard said making EVs more affordable and ensuring sufficient charging infrastructure can help boost sales.

“The only way you can fight this is making sure you create an environment where ... consumers are comfortable that EVs will work out with their daily routine,” he said.

Ross of Canadian Black Book agreed. “We run an annual survey through Ipsos that gives us some EV adoption insight,” he said, “and what we noticed this year is a lot of the concern around EV electric range has shifted to electric charging capabilities.

“The infrastructure is not there for capacity of mass adoption.”

Bourgeois has been addressing those concerns, Jeanson said. Over the past decade, the dealership has given about 100 chargers, valued at about $100,000, to customers, municipal offices, churches, golf courses and schools.

“It’s good for business,” Jeanson said, “and it’s all about giving in your community and helping the adoption of EVs.”

Jeanson advises dealers to embrace EVs by getting behind the wheel.

“They need to start driving the cars,” he said. “I always say, to fall in love with an EV or to understand it, you have to drive it. And then you’ll understand what it is and all the advantages. It’s a better car, it’s a smoother ride, it makes economical sense.”