Market Snapshot: Lower costs, better technology, and provincial policies are helping grow Canada’s small fleet of electric vehicles

Release Date: 2016-08-10

Canadian interest in electric vehicles (EVs)Footnote 1 is currently at an all-time high. In 2015, 6 930 EVs were sold in Canada – a 32 % increase over 2014. Canada still lags behind EV sales growth in China (250 % in 2015) and Europe (99 % in 2015), but was ahead of the United States (5 % decline in 2015).Footnote 2

Although Canadian EV sales have grown significantly in the last five years, they still accounted for only 0.4 % of total new vehicle sales in 2015.Footnote 3 Canada’s vehicle market, which has sales of almost two million vehicles per year, continues to be dominated by traditional fuel vehicles. Canada’s broader vehicle market also continues to experience a trend of larger vehicles and trucks outselling cars.

Source and Description

Source: Statistics Canada Table 079-0003, EV Volumes, NEB calculations

Description: This graph illustrates annual electric and traditional fuel/non-electric vehicle sales in Canada from 2005 to 2015, and the percentage of total vehicles sold that were EVs. Total vehicle sales have increased from 1.6 million in 2005 to 1.9 million in 2015. Vehicle sales dipped to 1.5 million in 2009 due to an economic recession. EV sales increased from essentially zero in 2010 to 6 390 vehicles in 2015. The percentage attributable to EVs increased from essentially zero in 2010 to 0.4 % in 2015.

Current and planned provincial policies increase the possibility of high EV sales growth in the future. Some provincial governments have made EVs core policies within their climate change action plans.Footnote 4 Substantial incentive programs, particularly in British Columbia, Ontario, and Quebec, also support early-stage adoption of EVs by reducing consumer costs. Lastly, nearly all provinces have, at minimum, demonstration projects or charging infrastructure programs for EVs.

Other developments also favour greater EV adoption. The preferred battery technology for EVs, lithium-ion, has seen costs decline 70 % in the last 18 months. In addition, technological improvements allowing for extended battery capacity and vehicle range are expected to make EVs increasingly more competitive against their gasoline or diesel powered counterparts.

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