Reducing Barriers to the EV Transition in Canada

This year is a watershed moment for Canada’s transformation to electric vehicles (EVs). EV sales hit a high of 8.9%, up from 0.1% a decade ago. Over the same period, the number of EV models available to Canadians has grown from just three models to well over 70, with another 41 models anticipated next year.

Equally exciting is the $25 billion in new investments announced by automakers in Canada over the past three years. Most of this job-creating investment is dedicated to EV assembly and the battery supply chain. 

Despite this recent momentum, Canada’s slow charging infrastructure rollout and weak consumer incentives threaten our success with the EV transition. Canada can lead and win in the race to electrify, but it will take a comprehensive national effort to address the barriers to EV adoption and improve EV readiness.

Powering the EV Transition

According to the most recent consumer survey from J.D. Power, the majority of Canadians (66%) say they are either “very unlikely” or “somewhat unlikely” to consider an EV for their next vehicle purchase. Range anxiety, purchase price, and a lack of charging infrastructure are the top roadblocks cited by survey respondents. 

“The majority of Canadians (66%) say they are either “very unlikely” or “somewhat unlikely” to consider an EV for their next vehicle purchase. Range anxiety, purchase price, and a lack of charging infrastructure are the top roadblocks.”

KPMG’s third annual consumer auto poll found similar results with 70% of respondents citing concerns with the availability and reliability of public charging stations. Another 83% say Canada needs to adopt an EV charging uptime standard and regulatory framework to track charger uptimes for improved reliability. 

Clearly, getting more Canadians behind the wheel of an EV requires an urgent, coordinated plan to build infrastructure and alleviate concerns with charging.

Fortunately, there is a roadmap for how we succeed in providing Canadians with accessible, convenient, and reliable charging infrastructure. The recently published Zero-Emission Vehicle (ZEV) Timeline outlines the charging infrastructure required to support the government’s ambitious target of 100% EV sales by 2035. 

According to government projections, EV sales need to reach 400,000 vehicles in 2026, 1.2 million in 2030, and 2 million in 2035. This means a sixteen-fold increase in sales from 2022 levels. Growth rates of this magnitude will result in 12.4 million EVs on Canada’s roads in the next 12 years, up from just 250,000 ZEVs on the road today.

“Canada will need 195,000 public charging ports by 2030 and 442,000 by 2035 to realize the goals we set for our EV transition.”

Keeping this rapidly growing fleet charged will require an extensive network of public and private EV chargers. Natural Resources Canada estimates that Canada will need 195,000 public charging ports by 2030 and 442,000 by 2035 to realize the goals we set for our EV transition. 

If we use the more ambitious charging targets set by California, a jurisdiction with significantly more EV experience than Canada, the projections increase to 383,000 public chargers by 2030 and 1 million by 2035.

While the amount of charging needed can be debated, one thing is obvious – Canada is not building charging infrastructure fast enough. 

Today there are just 18,400 public EV charging ports available to Canadians with no obvious plan to get to the 422,000 additional chargers required in 12 short years. Making things even more challenging is the fact that these public charger estimates depend on 2.2 million EV chargers being installed in multi-unit residential buildings (MURBs) over the same period. 

“This lack of charging is going to negatively and disproportionately affect low-income Canadians who are more likely to live in rentals without access to home charging.”

Most concerning is that this lack of charging is going to negatively and disproportionately affect low-income Canadians who are more likely to live in rentals without access to home charging. The situation is just as problematic for those living in rural and northern communities with lower access to public charging. 

If we have any hope of meeting the ambitious EV sales targets established by the government, urgent action is required to put Canada on the path to widespread adoption. 

1. Implement a national charging rollout plan

A good place to start would be to tie the government’s EV sales targets to public charging infrastructure requirements. Sales targets will be unachievable if they are not coordinated with the charging rollout.  

2. Develop policies for the provision of charging in MURBs

The ultimate amount of public EV charging required is highly dependent on how many Canadians can easily and affordably charge their vehicles at home. This will be particularly challenging for MURB-dwellers who are at the whim of outdated building codes, condo corporation rules, and prohibitively expensive retrofits.  

Canada needs to implement policies that will ensure a sufficient proportion of existing and new MURBs provide charging infrastructure to residents. Some municipalities and provinces are advancing smart policies to address the MURB challenge. Coordination nationally will ensure regional disparities don’t threaten adoption. 

3. Ensure the electricity grid is ready for the EV transition

And finally, we must make sure that Canada has the clean electricity generation and grid capacity needed to support the charging infrastructure. In Ontario alone, decarbonizing the electricity system will cost between $375 billion and $425 billion. According to a BCG study, utilities will need to invest between $1,700 and $5,800 USD per EV in grid upgrades. 

Helping Canadians with the EV Transition

Once a potential EV driver can be assured that they will be able to charge their vehicle, the next barrier to overcome is affording a new or used EV. 

According to KPMG, more than a quarter (26%) of Canadians said the cost of an EV is preventing them from buying one, with rising interest rates compounding the affordability challenge. Rising interest rates have put EVs out of the price range for 81% of respondents.

“The single largest barrier to EV adoption is the higher cost of the vehicles. That’s due to the average transaction price for an EV today being about $14,000 higher than the average price of a vehicle powered by an internal combustion engine.”

The federal government’s own survey concluded that the single largest barrier to EV adoption is the higher cost of the vehicles. That’s due to the average transaction price for an EV today being about $14,000 higher than the average price of a vehicle powered by an internal combustion engine.

Further exacerbating the affordability challenge is the government’s proposed EV sales regulations that will have a disproportionate impact on low-income households due to the higher costs of EVs and installing charging infrastructure. Rural and northern Canadians will face more difficulties than urban Canadians given a lack of public charging infrastructure and higher electricity prices.

Provide Canadians with Stronger EV Purchase Incentives

Addressing the affordability challenge depends on stranger consumer incentives. The $5,000 consumer purchase incentive provided by the federal government is not nearly enough to help all Canadians go electric. In fact, Canada falls outside the top 20 countries globally when it comes to helping consumers purchase ZEVs.

At a minimum, we need to keep pace with the strong consumer incentives in the US Inflation Reduction Act that gives Americans up to $10,000 ($7,500 U.S.) when they switch to electric. And for those fortunate enough to have access to parking at home, consumer support in the form of grants or tax credits for Canadians who install a home charger will go a long way. 

With urgent action and a smart plan, Canada can lead in the EV transition.