EVs and Their Effect on the Canadian Vehicle Ecosystem

While electric vehicles (EVs) currently account for a relatively small share of the world auto market, sales are sharply increasing and should continue to rise in the next decade. According to IHS Markit’s year-end 2021 Automotive Insights report, 5.6% of new vehicle registrations in Canada last year were all-electric.¹ IAA explored the overall EV landscape and its impact on the global vehicle ecosystem in a recent white paper on IAAI.com. 

Governments around the world are incentivizing manufacturers to help address climate change by eliminating fuel emissions, and the Canadian legislature is no different. There are, however, some interesting differences across the country’s various provinces. 

Provincial Inequalities 

In June 2021, the Canadian government set a mandatory target of 2035 for all new light-duty cars and passenger trucks to be zero-emission (ZEV), accelerating the country’s initial 2040 goal of 100% ZEV for new sales.² Time will tell if this target can be reached, but manufacturers are investing billions into all-electric makes and models this decade.³ Audi and Volkswagen each plan to cease selling internal combustion engines (ICE) entirely by 2033. 

However, a key barrier at present to overall EV adoption across Canada is availability. According to a recent survey, over half of Canada’s dealerships have zero EV inventory. Despite an overall increase in sheer numbers, that figure eclipses 80% for dealerships outside British Columbia, Ontario and Quebec. Fewer than a quarter of dealers nationwide had three or more EVs in stock at the time of the survey.  

EV registrations varied in 2021 across Canada due to varying provincial incentives, with new registrations for ZEVs in British Columbia reaching 13% through 2021, accounting for 28% of registrations nationwide. The province is Canada’s first to crack the one-tenth milestone for adoption of ZEVs. Quebec was second with nearly 9.5% of new registrations in 2021, with Ontario lagging behind at 3.3%, a smaller figure some attribute to the removal of a provincial incentive in 2019. 

Making up about 40% of the value of an EV is its lithium-ion battery, and proper maintenance of this component will lengthen the vehicle’s lifespan.⁴ Canada, much like any region that experiences extreme winter cold, would seem to present a unique challenge when it comes to maintenance of EV batteries. But recent data suggests that while EVs may experience a slight decrease in overall range during extreme cold, maintaining a charge on a salvage EV’s battery will prevent winter battery degradation.⁵

Here at IAA, we’re very excited about the wealth of opportunities presented by emerging EV markets, and we’ll always strive to keep our EV customers up to speed on the latest developments across North America and abroad. 

1. https://electricautonomy.ca/2022/02/15/ihs-markit-zev-adoption-canada-2021/

2. https://www.canada.ca/en/transport-canada/news/2021/06/building-a-green-economy-government-of-canada-to-require-100-of-car-and-passenger-truck-sales-be-zero-emission-by-2035-in-canada.html

3. https://www.caranddriver.com/news/g35562831/ev-plans-automakers-timeline/ 

4. https://www.caranddriver.com/research/a31875141/electric-car-battery-life/ 

5. https://www.saskpower.com/about-us/our-company/blog/2021/myth-electric-vehicles-cant-handle-our-cold-saskatchewan-winters