Honda Canada CEO slams ZEV sales mandate during address at EV conference

Honda Canada CEO Jean Marc Leclerc says Canada’s zero-emission vehicle mandate has forced the country’s automotive sector onto a “collision course” with car buyers who remain skeptical about or unable to afford electric vehicles.

Consumers care about the environment, Leclerc said at the inaugural EV Innovation & Technology conference in Toronto Feb. 8, but they are “first and foremost transactional in their approach to buying a vehicle.”

“If customer psychological barriers are not urgently addressed — affordability, range anxiety [and] charging infrastructure — mass adoption will not be possible.

“To progress as fast as the auto industry is mandated to move, there needs to be a massive coordination effort, and that effort needs to be led by government.”

Ottawa shared its plans to implement a national ZEV mandate in December. Under draft legislation expected to be finalized in the coming months, ZEVs must make up at least 20 per cent of each automakers’ sales in Canada by model year 2026. The figure rises to 60 per cent of sales by 2030 and 100 per cent by 2035.

“There is no doubt the industry and market dynamics will find their balance over time … The real challenge, in my view, are the transformation years leading to 2030,” Leclerc said.

To give average Canadian car buyers the ability to go electric in that time frame, governments must step in with more assistance, Leclerc added.

“As it stands today, the average transaction price for an EV in Canada is in the range of what was considered a luxury vehicle not too long ago, [which is] well beyond the means of average Canadians.”

Ottawa currently offers an up to $5,000 incentive for ZEV buyers, while British Columbia, Quebec and the Atlantic provinces offer additional rebates of between $2,500 and $7,000.

More government support for an auto supply chain rapidly transitioning to EV production, as well as further backing for Canada’s “woefully underdeveloped” charging infrastructure, will also be needed if Ottawa wants to reach its ZEV targets, Leclerc said.

HONDA A 'LAGGARD'

For Honda’s part, Leclerc acknowledged the automaker has been seen as a “laggard” on electrification. He blamed the momentum behind battery-electric technology, and away from wider climate targets for the perception.

“Things have changed — from a focus on greenhouse gas reduction objectives, to a regulatory path focused on the use of a specific technology, and targets and implementation timelines to push that technology to market.

“Prior to the proposed [ZEV] legislation at play today, our plan was to use a measured cadence of technologies, first consisting of hybrids, followed by plug-in hybrids, and then moving to electric vehicles as market conditions and consumer acceptance allowed for mass adoption.”

While Honda has been a longtime leader among its peers on fleet efficiency, Leclerc said the company is compressing typical vehicle development timelines in response to ZEV mandates.

The company, which has no battery-electric vehicles available in Canada today, plans to launch the Prologue in partnership with General Motors in 2024, as well as its next-generation fuel cell-electric vehicle based on the CR-V. A range of BEVs based on the company’s own EV architecture will follow starting in 2026.

Honda also overhauled its global organizational structure Jan. 24, creating a consolidated division for electrification technologies in a bid to speed development.