How to Drive Fleet Electrification in Canada

Canada stands at a crucial juncture to take action on climate change in the rush to lower emissions rapidly. With our emission targets looming large, and growing awareness of poor air quality spikes in our cities, there’s a pressing imperative for measures to both lower emissions and reduce air pollution. To make a massive dent in both problems, we need investment in sustainable transportation.

Today, transportation accounts for 22% of Canada’s emissions. Diesel trucks and buses, particularly those used for deliveries, contribute to those emissions disproportionately. Though they comprise just 10% of our road vehicles, diesel trucks and buses emit over 6% of our total national emissions. If we want to meet our emissions targets on time, more is needed than just a strategy to electrify transportation – governments and industry need to act.

Why Canada Must Act on Electrification Now

This is not just a matter of numbers. The very air we breathe is at stake. Currently, 30% of Canadians live within 250 meters of a major roadway where they are exposed to traffic-related air pollutants that can be 40% to almost 300% higher than average. This is due in part to particulate matter from tailpipes, mostly from medium and heavy-duty vehicles (MHDV). Weekday air quality, in Metro Vancouver for example, has double the nitrogen oxide emissions compared to that of the weekends due to the surge in heavy traffic, making the air we breathe worse for city dwellers during the week.

There is an opportunity to set Canada apart as a leader in electrification. Elsewhere in the world, the winds of change are starting to blow strong. In the US, 10 states have mandated an end to combustion engine truck sales by 2036. On a federal scale, stringent tailpipe emission standards are ushering in a surge of zero-emission vehicle (ZEV) sales. Across the Atlantic, the EU is also setting the pace with aggressive emissions-reducing targets for the MHDV sector. They aspire for reductions of 45% by 2030, 65% by 2035, and a staggering 90% by 2040, measured against 2019 figures, with some cities even introducing zero emissions zones and charging surcharges to internal combustion engines driving into those city centers.

These countries have moved past talking about the challenges and potential solutions, to introducing focused measures to get the work done. In this global electrification rally, where does Canada fit?

Canada’s Electrification Landscape

At the federal level, Canada’s ambition to curb emissions is evident, with initiatives like the Incentives for Medium- and Heavy-duty Zero-Emission Vehicles and Zero-Emission Vehicle Infrastructure Program and the introduction of clean technology tax credits for off-road vehicles. However, regulations to require ZEV deployment are not keeping pace, and with zero-emission medium and heavy-duty vehicles constituting under 1% of sales, Canada’s journey toward the 2030 and 2040 zero-emission goals seems daunting.

Provincially, Quebec is carving a niche with its electric vehicle and infrastructure development agendas and incentives. Their approach mirrors successful models like California’s and sets standards for the rest, with additional focused programs to accelerate deployments in targeted cases such as school buses. BC also promotes electrification. Yet, the full potential of electrification remains largely unrealized, even in these provinces.

Regrettably, the majority of provinces and regions are yet to seize this pivotal shift to electrified transportation, overlooking its economic and environmental benefits.

Challenges and Opportunities: Two Sides of the Coin

In Canada, the paramount challenge is our being slow to act and to move forward from strategies to action. Conversations, while essential, have now reached a saturation point. They are only as good as the action that follows them. The hour demands swift, focused, and coordinated action and collaboration among industries, original equipment manufacturers (OEM), governments, fleet decision-makers, and transport buyers.

Despite this challenge, the opportunities are aplenty.

Consider this: Converting just 10 last-mile delivery trucks to electric vehicles can achieve the same emissions-saving impact as 56 households transitioning to electric cars.

Beyond ecological duty, electrification presents unparalleled growth prospects. The total cost of ownership narrative becomes pivotal in this setting. In specific scenarios, like cargo vans and yard tractors operating return-to-base routes under 250 km, with enough time to charge, the interplay of currently available technology, costs, and incentives makes electrification immediately viable. 

Deploying all-electric delivery trucks not only helps the environment, but also helps companies save on costs. Fleets are seeing 40% to 50% savings in maintenance and fuel costs by operating electric trucks instead of traditional diesel models. In the stop-and-start business of last-mile delivery, this is even higher.

Taking a leaf out of California’s book, Canada can emerge as a cleantech frontrunner. By investing holistically in the ecosystem in focused markets – from OEMs to infrastructure – we will not just meet our emission targets but also create jobs and stimulate our economy, placing Canada at the forefront of the global EV transition.

The Path Forward: Actionable Steps for Canada

Historically echoing our southern neighbor, Canada is poised to lead. We have made-in-Canada affordable ZEV technology for urban delivery and buses, so let’s deploy it and in the process reduce our emissions and improve air quality for Canadians from coast-to-coast-to-coast. Canadian companies like 7Gen, Lion Electric, Vicinity Motors, and SWTCH are leading the way, focusing on making EV technology accessible and practical for companies here at home. But for real progress to take hold, we need all of government and industry to pitch in.

The onus and leadership begin with the federal government. A more aggressive incentive structure for specific MHD ZEVs and grants for research and development, coupled with regional air quality or ZEV zone regulations, can catalyze the transition and incentivize companies to make the switch to electric vehicles. Not only are they working towards net zero, but there is also a business case for operational savings as well. Encouraging public-private partnerships and electrical grid resilience can also propel our goals forward.

While some provincial and local governments are blazing the trail, others must join the race – or risk not only being left behind but leaving their communities behind in the process too.

Beyond incentives, there’s a need for regions to push demand for EVs with air quality regulations and favourable access. With increased demand, we must then build reliable infrastructure with charging stations, EV service centers, and more. Education is equally critical. Investing in programs that inform about the available incentives and benefits of EVs, plus building service and maintenance capacity, will help in building acceptance and successful uptake.

When it comes to industry, it’s time to be visionaries. Let’s invest in technology, collaborate with governments, and build the decarbonized and electric future that is essential for our cities to achieve our net zero ambitions. Retailers possess monumental buying power, which can significantly trim emissions. By embedding “sustainability sticks” into their transport operations and procurement, retailers can build a transformation. IKEA, for instance, pledged 100% ZEV for last-mile deliveries by 2025. In order to realize this ambitious goal, IKEA is in turn helping build up their third-party logistics providers by providing charging infrastructure and longer contracts to help achieve these goals. By scoring ZEVs in transport RFPs beyond mere costs, and setting explicit transportation emissions targets, retailers and buyers of transport have an impactful role to play in advancing ZEV deployment, lowering emissions, and improving air quality in our country.

The electrification of fleets isn’t just an environmental imperative but an unparalleled opportunity for growth, innovation, and leadership. Canada has all the tools to lead this global transition. It’s time to charge up and drive into a cleaner, brighter future.