EV prices need to drop by one third if Canada wants to hit sales targets, says gov't report
CTV
Unless policies or technologies change, the ownership cost of electric vehicles needs to decrease by 31 per cent if Canada wants to reach its sales target of 60 per cent EVs by 2030, according to a new report released Thursday by Parliamentary Budget Officer Yves Giroux.
Unless policies or technologies change, the ownership cost of electric vehicles (EVs) needs to decrease by 31 per cent if Canada wants to reach its sales target of 60 per cent EVs by 2030, according to a new report released Thursday by Parliamentary Budget Officer (PBO) Yves Giroux.
"In the absence of a government mandate and regulations forcing manufacturers to sell at least 60 per cent of zero-emission vehicles, that's the price differential that one would need to meet these targets," Giroux said in an interview with CTV News Channel on Thursday.
Last December, the federal government unveiled its Electric Vehicle Availability Standard that outlined zero-emission vehicle sales targets for automakers. The standard requires all new light-duty sales in Canada to be electric or plug-in hybrid by 2035. There are also interim targets of at least 20 per cent of all sales being EVs by 2026 and 60 per cent by 2030. Auto manufacturers who do not meet those targets would have to pay into charging infrastructure.
The most recent statistics show that electric vehicles accounted for nearly 11 per cent of new vehicle registrations in 2023, but there are concerns that driver demand is slowing down. Growth forecasts for auto companies have plateaued and concerns about charging infrastructure persist. The price of EVs has also pushed the cars out of reach for many consumers. According to the Canadian Black Book, the average cost of an EV was $73,000 in 2023.
But the PBO does acknowledge that consumers could save thousands of dollars in the long run by switching to an electric vehicle. According to the report, the ownership cost, which includes the price of a car and operating costs, of an EV over eight years would be $62,920 if the car was purchased in 2022, while the cost would be $71,680 for a gas-powered vehicle.
"It means that the relative price has to go down for EVs. It can be done by bringing the cost of electric vehicles down, but it could also be by increasing the cost of all the other alternatives, which is the gas- and diesel-powered cars and trucks," Giroux said.
In 2019, the federal government started offering an incentive of up to $5,000 for eligible consumers to buy or lease specific makes and models of EVs. The program was set to expire in early 2025, but the Liberals' budget this past spring extended the program with a $607-million top-up over two years.
