Though consumers have been hearing about electric vehicles for decades, it's taken a while for the electric vehicle market to grow. In recent years, that's changed. Electric vehicle sales have increased dramatically around the world and in Canada, driven at least partially by a strengthened concern about global warming and pollution.
Experts predict that by the time all calculations are complete, the 2020 global electric vehicle market is expected to reach around 2.5 million sales. The 2021 electric vehicle market forecast anticipates a further 70% increase from 2020's figures.
The electric vehicle market in Canada is lower than the global electric vehicle market, though it has steadily increased in recent years, with sales of electric vehicles reaching more than 30,000 in 2018.
Why Electric Vehicles are Important
There are several factors that contribute to the importance of electric vehicles. With an increased focus on environmental impacts and customers concerned about fuel prices, electric vehicles can fill a vital need.
According to research, an electric vehicle can reduce greenhouse gas emissions by up to 80% over gas vehicles. Replacing internal combustion engines with electric vehicles can have an important positive impact on the environment and can significantly reduce pollution and greenhouse gas emissions.
The long-term costs of owning an electric vehicle can also outweigh the initial costs. Electric vehicles cost up to 75% less to fuel annually than gas-powered vehicles. Because electric vehicles have fewer moving parts, they also typically require less routine maintenance, meaning electric vehicle owners will pay lower maintenance costs overall compared with people who own vehicles with internal combustion engines.
Electric Vehicle Challenges and Opportunities
There are significant advantages to electric vehicles, but they also come with challenges.
These electric vehicle challenges include:
Limited electric vehicle options
The limited options and higher prices for electric vehicles in Canada, and especially electric trucks in Canada, have hurt sales. In 2018, there were only nine truck models available to Canadians. There were 26 models for passenger cars. In the same year there were more than four electric cars sold for every electric truck sold. More automobile makers are expected to join the electric vehicle market share in coming years, increasing the range of options available.
Higher electric vehicle prices
Prices are a concern for some consumers as well. An electric vehicle typically costs more than the comparable gas model, and prices aren't expected to be on par until at least 2026.
Higher charging times for electric vehicles
Charging times are an additional challenge. A standard 120-volt plug can fill a battery to nearly full, but it takes about 20 to 40 hours to do so. A 240-volt charge can decrease the charging time to eight hours or less, but requires an outlet similar to those used for electric ovens and is more costly. The fastest charger can charge an electric vehicle to 80% in 30 minutes, but costs between $20,000 and $35,800 USD.
Lack of electric vehicle charging stations
The lack of charging stations could also be affecting sales of electric vehicles in Canada. Consumers can't refuel their cars at typical gas stations. Instead, they have to consider the availability of charging stations, which limits people in rural areas who have fewer charging options. Though some owners can charge their cars at home, those who live in apartments or have a long commute likely will not have the necessary infrastructure to adequately recharge their cars.
Further, the lack of charging stations means people are reluctant to use electric vehicles for long-distance travel, where they may be required to recharge their car for 30 minutes every two to three hours—drastically increasing the length of a road trip.
These challenges can be weighed against the benefits, which include lower maintenance costs, government subsidies to offset financial output, and decreased greenhouse gas emissions.
The Future of Electric Vehicles
The future of electric vehicles looks bright. As technology evolves, the options and opportunities for electric vehicles will continue to grow. This includes developing and marketing autonomous vehicles, building more recharging stations and improving recharging technology to make it more efficient, improving battery technology, and pushing development of solar-powered cars. Further, by increasing EV capacity and decreasing production costs, the upfront and long-term costs associated with electric vehicle ownership will go down.
Transport Canada has set ambitious targets for electric vehicles in Canada, aiming to have 10% of all light duty cars be electric by 2025, increasing to 100% by 2040. To encourage people to buy electric vehicles, the Canadian government is offering cash rebates for purchases and incentives to build more charging stations.
How the Electric Vehicle Market Share Can Affect Business Owners
The Canadian electric vehicle market is expanding, and with improved technology and government incentives, it should continue to grow. According to one report, many Canadians plan to buy an electric vehicle over the next five years, motivated by both environmental concerns and finances. With such a significant focus on electric vehicles, the automotive landscape is shifting to more environmentally friendly and cost-effective automobile options.
Installing an electric car charging station at your business can help you establish your commitment to carbon-neutral options for your employees and customers, while it could even be a potential revenue stream that grows as more Canadians purchase electric vehicles. If your business relies on foot traffic, consider the appealing option of a potential customer waiting for a charge and browsing your store.
This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. It should not be regarded as comprehensive or a substitute for professional advice.