Is a sales mandate the right approach to ZEV adoption?

(Left to right row one): Huw Williams, Director of Public Affairs, CADA and Tim Reuss, President and CEO at CADA. (Left to right row two): David Adams, President of GAC and Brian Kingston, President and CEO at CVMA.

The heads of three major automotive trade associations in Canada came together on April 1 to discuss the federal government’s recent announcement around a zero-emission vehicle sales mandate, along with key elements needed in the federal Budget to achieve these targets.

Huw Williams, Director of Public Affairs at the Canadian Automobile Dealers Association (CADA) moderated the virtual ZOOM press conference, which considered elements of the 2030 Emissions Reductions Plan announced by Prime Minister Justin Trudeau on March 29. That plan mentions the development of a regulated sales mandate, and an interim target of at least 20 per cent of new passenger vehicles sold in Canada being ZEVs by 2026.

“Whenever somebody tries to mandate what consumers can or cannot buy, consumers will not necessarily just follow instructions,” said Tim Reuss, President and CEO at CADA. “They will do whatever’s best for their daily, private, and business life and business needs.”

Reuss provided the example of electric pickup trucks, which are currently not yet available in the marketplace. What is generally available are smaller vehicles and passenger cars, but the Canadian and American marketplace generally leans more towards sport utilities and pickup trucks when it comes to consumer preferences.

“There are quite a few jurisdictions around Canada where buying a pickup or a large SUV is a necessity. It is not a life choice. It is a necessity. People need the pickup for their work and their private lives,” said Reuss. “What is a person to do that is looking for that vehicle and it’s either not available or not incentivized? Is he now all of a sudden supposed to buy a subcompact car?”

Brian Kingston, President and CEO of the Canadian Vehicle Manufacturers’ Association (CVMA), said regulating the vehicles that consumers buy involves two key factors that will enable them to want to make the switch to electric: consumer incentives and infrastructure.

“You can regulate that Canadians need to buy EVs, but if the infrastructure is not there to meet the daily driving needs of a vehicle purchaser, they will not make that shift,” said Kingston, adding that “with one third of Canadians living in multi-unit residential buildings—where you don’t have access to charging in your parking stall (and) you may not have access to accessible street parking—it’s very difficult to convince someone in that situation to move to an EV.”

There are numerous garage orphans in Canada that either do not have a garage, or the underground parking in their condo/residential unit does not include or allow for this type of charging, and/or there is no available charging infrastructure nearby. But as Kingston notes, this infrastructure, along with the consumer incentive, are prerequisites to electrification that need to be in place before a higher level of EV uptake can happen.

On the cost of EVs, David Adams, President of the Global Automakers of Canada (GAC), said the sticker price is currently more than that of conventional internal combustion engine (ICE) vehicles, but that this will change in the future. However, that future may be a little farther away than previously imagined.

“At the current moment, we need to have some significant incentives in place to encourage consumers to make that switch,” said Adams, adding that “what the government also needs to focus on a little bit more, is looking at fleet operators that actually have an incentive to transition to zero-emission vehicles, because they do look at that total cost of ownership (and) your average consumer.”

He adds that “The reality is, when we look at the numbers that the government wants to have on the road, we need to be putting shovels in the ground now to build out the infrastructure, so that we’ve got that infrastructure built out well ahead of the adoption curve.”

Adams said consumers will not wait an hour and more for a DC fast charger to charge their vehicle, nor will they wait for someone else to charge their vehicle.

CVMA’s Brian Kingston said there are a number of examples around the world of mandates that have been put in place and have been unsuccessful, due perhaps to a lack of investment from the government in things like charging infrastructure and incentives.

“If you look at the Northeast U.S. states, a number of which have sales mandates, ZEV adoption is sitting at below 5 per cent in all of those states. So it’s not a policy that’s shown to be successful in this transition,” said Kingston. “There’s really only two countries that are out in front of other jurisdictions: Norway and Iceland.”

He said Norway reached nearly 75% per cent of EV sales and Iceland sits at around 50 per cent. Both countries do not have a ZEV mandate, but they do have a large focus on infrastructure and a range of incentives.

“This policy isn’t proven to work. We know what works, and that’s why we’re recommending to the government that they really come out with a detailed strategy to address these very well documented barriers to EV adoption,” said  Kingston.

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