Major automakers in Canada are skeptical about the feasibility of the government's goal to phase out new gasoline-powered vehicles by 2035, citing concerns over consumer demand for electric vehicles. While executives from Toyota and Honda acknowledge that consumers may transition to EVs if certain conditions are met, such as affordability, range, and charging infrastructure, they believe these aspects are currently lacking.
Statistics show that EVs accounted for only 11% of new vehicle registrations in Canada in 2023. BloombergNEF has revised its projections for EV sales in the country, estimating that by 2035, they will constitute around 70% of new passenger vehicle sales. Despite government incentives to promote EV adoption, including up to C$5,000 for zero-emissions vehicle buyers, many potential customers remain hesitant.
Challenges such as reduced battery range in cold temperatures, range anxiety due to long distances between major cities in Canada, and the need for a widespread charging infrastructure pose obstacles to widespread EV adoption. While the government aims to have 84,500 chargers and 45 hydrogen stations by 2029, experts estimate that around 200,000 public chargers will be needed by 2035.
Auto industry stakeholders have called for closer alignment with the less aggressive emissions targets seen in the US, where over 50% of new vehicle sales are projected to be electric by 2032. However, Prime Minister Justin Trudeau's government remains committed to its ambitious zero-emission vehicle targets.
Despite concerns, Honda Canada plans to invest significantly in EV manufacturing in Canada to cater to the changing market demands. The company aims to lower battery and manufacturing costs by leveraging local supply chains for raw materials. Toyota, on the other hand, is cautious about building EVs in Canada at this time and is currently focusing on the transition to hybrid vehicles.
As the industry navigates the challenges of transitioning to electric mobility, automakers and policymakers will continue to work towards a future where electric vehicles play a significant role in reducing emissions and combating climate change.