Thirty-seven per cent of Canadian consumers are more likely to purchase a smaller or more fuel-efficient vehicle this year, while 29% are more likely to buy an alternative-fuel vehicle, according to Canadian Black Book’s 2022 Ipsos survey.
With so much going on in the world, such as the war in Ukraine and rising gas prices, the study shows that Canadian consumers “are still kind of dipping their toe into the electric vehicle field,” according to James Hancock, CBB Director of OEM Strategy and Analytics.
“We’ve seen an increase in the likelihood of a Canadian consumer looking to buy an EV in the next five years. It went from about 30% last year to 39% this year. That’s a good trend,” said Hancock in an interview with Canadian auto dealer.
The annual survey measures car buying habits and trends across Canada. For 2022, the survey shows that 46% of Canadian drivers 18 years and over are likely to purchase a vehicle over the next 24 months—up from 44% in 2021, but still down from pre-pandemic levels. With the rise in gas prices, which may fluctuate in the short term but are “here to stay,” more consumers will start eyeing vehicles that are less fuel dependent.
When the pendulum swings the other way, heavier vehicles such as pickup trucks and SUVs are typically the preference. But with gas prices creeping up, consumers tend to look for more fuel efficient options like alternative-fuel vehicles, although the sticker price remains a barrier to broader adoption.
Based on the study, 36% of consumers said the purchase price is the most important consideration. So while a combined 66% of consumers are looking at more fuel-efficient options, another 18% are more likely to use public transit, 17% are more likely to reduce the number of household vehicles, and 19% are more likely to use ride-sharing services.
It is worth noting that the percentage of consumers that are less likely to use public transit in 2022 declined by nine points (45%) in 2021. That decrease is most notable among consumers aged 18 to 34, in which 50% were less likely to use public transportation in 2021—a number that dropped to 27% in 2022. And four in 10 consumers are also less likely to use ride-sharing services this year.
Still, Hancock said more needs to be done to get the Canadian consumer over the hurdle of buying an electric vehicle, which means pricing needs to improve (and likely will as more models enter the market), more educating is needed (including around battery degradation and replacement costs), and the overall electric infrastructure across Canada needs to improve.
Electrification aside, Hancock also flagged an interesting finding in the study around digital retail.
“Another thing that we hear a lot about in the Canadian auto world is digital retailing—it’s starting to progress. You’re seeing more and more Canadians accept it,” said Hancock. “However, it still looks like we’re not there.”
Hancock said they looked at how likely a Canadian consumer would be to purchase their vehicle completely online without going to a dealership, which he said is currently “not very likely.” The Canadian consumer, he said, still prefers going into the dealership to see and touch the vehicle, trade in their car, and talk to a salesperson.
“Of course, with that, the main concern for Canadians right now is the price of the car. That seems to be the top consideration when they’re looking to buy a car right now,” said Hancock.
The 2022 Ipsos poll was conducted between February 11 and 14, 2022, on behalf of Canadian Black Book. It included 1,000 Canadians, who own or lease a car or truck, or who are looking to buy a vehicle within the next two years, and who are 18 years old and over.
Credit: Canadian Black Book.
