It wasn’t exactly the best kept secret in Ottawa.
Auto industry insiders had a pretty clear idea that Ottawa’s zero-emission vehicle mandates were going to roll ahead pretty much unchanged despite unified industry efforts to persuade the government to change their approach.
On Dec. 19, Steven Guilbeault, the federal Minister of Environment and Climate Change, made that official when he announced that the federal government had finalized its new Electric Vehicle Availability Standard. The government says the mandate is meant to help increase the supply of zero-emission vehicles to Canada.
The leaders of Canada’s auto industry groups expressed their concerns in a joint press conference last week and reiterated them in a series of announcements.
The new standards maintain a 100 percent zero-emission sales target by 2035 with interim targets of at least 20 per cent by 2026 (about double today’s sales levels) and at least 60 per cent by 2030.
“Canada’s Minister of Environment and Climate Change of Canada, Steven Guilbeault, just officially presented the EV sales mandate (renamed to a more PR-friendly ‘EV Availability Standard’),” said Tim Reuss, President & CEO of the Canadian Automobile Dealers Association, in a statement provided to Canadian auto dealer. “It is encouraging to see that one of the solutions we have been asking for to account for the vastly different geographical realities of Canada for which full electric vehicles are not an option, has been included: Plug-in Hybrids (PHEVs) with a range of at least 80 km will remain eligible with full credit even after 2035 (although limited to 20 per cent of the overall volume starting in 2028).”
But that was only one positive outcome Reuss singled out. “However, we are disappointed that the most important precondition (an available and functioning charging infrastructure) is still not receiving the necessary attention and funding; the announced incentives to be given to OEMs investing in charging infrastructure does not come close to addressing this. Also of note is that the Minister acknowledges that 80 per cent of Canadians expect to charge at home, yet no solutions or assistance are being considered for existing multi-family homes or condos,” said Reuss.
He said the government also did not address the key issue of the affordability of EVs, and said it even acknowledged that price parity of EVs with ICE vehicles won’t happen before the end of the decade. “We will continue advocating on behalf of our members to ensure that Canadians can afford, use and charge their vehicles in a manner that suits their different lifestyles and geographical requirements.”
For their part, the Global Automakers of Canada, the industry association representing auto manufacturers other than the Detroit Big Three, expressed their disappointment and called for the creation of a forum to foster improved dialogue.
“Today isn’t about arguing whether a ZEV mandate is the right policy tool or not, that decision was made last year; today is about determining whether or not the government has provided realistic pathways to achieve aggressive ZEV sales targets that automakers will bear the consequences, regardless of whether appropriate infrastructure is built out, purchase incentives are maintained, consumer interest is sustained, or external supply chain shocks limit or constrain ZEV production,” said David Adams, President and CEO of Global Automakers of Canada (GAC), in a statement.
Adams said GAC wants to see a dedicated forum created so that the federal government can connect with OEMS, the energy sector, and consumer groups — “those with skin in the game,” to tackle key challenges.
David Adams
Those challenges include electricity generation and distribution, charging infrastructure, affordability, and education and awareness. “All of which needs to be addressed to remove the barriers blocking the broader consumer adoption of ZEVs in Canada,” said the GAC in their statement.
Hyundai Auto Canada also had concerns; although it said it supports the objectives outlined in the federal government’s updates to its light duty ZEV sales rules — it also sees the success of the program as depending on a greater effort to address the issues around charging infrastructure and vehicle affordability.
“We share their vision that the future is in fully electric vehicles that produce zero emissions,” said Don Romano, President and CEO of Hyundai Auto Canada, in a statement. “However, consumer adoption of EVs cannot solely rely on making these vehicles available to Canadians. In order to meet the government’s targets, a dedicated investment in charging infrastructure is necessary, especially for Canadians living outside of urban centres.”
Canadian auto dealer reached out to Darren Slind, respected industry analyst and the Co-Founder and Managing Director of the Clarify Group, a Markham, Ont. based consultancy group for a comment about the new standards.
“The EV Availability Standard is here, for now in any case. Did the government listen to the many consultations from industry experts and auto industry groups that are supportive of the end goal, but have a far deeper understanding of the challenges in getting there than our governments do? Sort of. But not enough,” said Slind. “The best part of the announcement? The eligibility of PHEVs.”
Slind said the challenges of the transition to EVs is lessened with the renewed focus on plug-in hybrids as part of the solution. He said it reduces pressure to build out infrastructure, it eases pressure on the supply chain, and creates the type of vehicle that any Canadian driver can use without the limits a pure EV can impose.
“Is it an interim solution? Yes, but a critical one. And limiting PHEVs to 20 per cent of overall volume as early as 2028 makes little sense given how powerful a catalyst they can be to this transition. But beyond that, we still face tremendous challenges that need to be addressed,” said Slind.
Slind said there are three key factors in the race to electrification: the urgent need for more affordable EV options in all segments, the need for a massive increase in public and private charging infrastructure, and the appetite of consumers to want to buy them. “For that to happen, there is much more work to be done, including by governments. Consumer rebates and fully participating in supporting infrastructure growth would be great places to start. The EV Availability Standard may be here, but transition is only just getting started,” said Slind.
Even in a province like British Columbia, with high adoption rates for EVs, the industry association has concerns over the way the government is moving. “The New Car Dealers of BC support the ongoing adoption of zero emission vehicles. However, we believe a common sense and flexible approach is the way to achieve the kind of success we are all looking for. Both the federal and BC governments are heading down a path of legislating arbitrary targets and imposing penalties on auto manufacturers which we fear will negatively impact the positive momentum that has been established in British Columbia,” said Blair Qualey, President and CEO, New Car Dealers Association of BC.
“BC is well on its way to meeting the initial federal and provincial target, but this largely includes early adopters. For widespread adoption to occur, greater mass-market interest will be required. This means converting consumers who may have concerns about the price of a new ZEV, have range anxiety, or have charging considerations – especially in they live in rural or remote areas of the province.”
For its part, in the news release announcing the new standards, Ottawa explained its motivations for imposing the mandates, or what they are now calling standards.
“Putting in place an Electric Vehicle Availability Standard fulfills a major climate commitment from our climate plan. Getting more electric vehicles on the road is another example of how we are taking climate action while helping make life more affordable. And our investments to position Canada as a significant player in the global electric vehicle manufacturing and battery supply chain shows how we are taking advantage of the economic opportunities provided by the emerging low-carbon economy,” said Steven Guilbeault, Minister of Environment and Climate Change in a press release announcing the ZEV standards.
Travis Allan, Chief Legal and Public Affairs Officer with FLO, an EV charging company with more than 100,000 public chargers, expressed support for the move, but singled out the need for more action on charging infrastructure. In a news release, Allan noted that ensuring a proper supply of reliable and convenient EV charging will be “an essential factor” in the success of the federal government’s regulation.
“The work that automakers, governments, utilities and the charging industry have already done is instrumental to making Canadians feel comfortable adopting EVs, and the finalized Electric Vehicle Availability Standard just announced by the Federal Government will help make the case for even more investment to support Canada’s EV charging assets,” said Allan in a statement.
