TORONTO — Sticker shock at the pump is driving more and more Canadians towards buying an electric vehicle. But manufacturers are having trouble keeping up with the demand, leading to long wait times for buyers.
In parts of the country, gas prices exceeded $2 per litre last month amid strong global demand for oil combined with Russia’s invasion of Ukraine. Halifax-based electric vehicle salesperson Jeremie Bernardin said he’s noticed an explosion of interest in zero-emission vehicles since the price of fuel started to take off.
"I think there’s a lot of people that were considering electric vehicles for a very long time, and they needed that extra little push," Bernardin, who is also the president of the Electric Vehicle Association of Atlantic Canada, told CTVNews.ca over the phone on Wednesday.
With so few electric vehicles on dealership lots, Canadians looking to buy a brand-new zero-emission car will have to put down a deposit and get onto a waiting list. Bernardin said the wait times can be as long as three years, depending on the manufacturer and the dealership.
Tesla, which makes Canada’s best-selling electric car according to the automotive publication , says delivery times for its vehicles range between three months to one year, depending on the model. But some manufacturers like Nissan have already completely sold out of their electric vehicle inventory for the 2022 model year.
Shortages of electric vehicles have been around long before the recent spike in gas prices. In March 2021, a report commissioned by Transport Canada found that more than half of Canadian dealerships had no electric vehicles in stock. The report also found that wait times exceeded six months at 31 per cent of dealerships that had no zero-emission cars in their inventory.
Interest in used electric vehicles has also surged amid the high gas prices. Used car maxjmtzywrketplace AutoTrader.ca says searches for electric cars in March 2022 increased 89 per cent compared to the previous year, while the number of inquiries sent to electric vehicle sellers through its platform jumped 567 per cent.
"It’s understandable that when the gas prices are expensive, consumers are looking to buy and get into electric vehicles," Baris Akyurek, AutoTrader.ca’s director of marketing intelligence, told CTVNews.ca in a phone interview on Wednesday.
SUPPLY CHAIN ISSUES PERSIST
The surging interest in electric vehicles also comes at a time when pandemic-induced shortages of microchips have been affecting the automotive industry at large since late 2020. Modern automobiles can have hundreds of microchips that control everything from the air conditioning to the power steering system, and a shortage of these crucial components have resulted in fewer vehicles being manufactured.
"Electric vehicles are subject to supply chain issues, just like anything else. Right now, the COVID pandemic has disrupted global supply chains. The auto industry specifically is seeing a microchip shortage that it’s been struggling with for the past year or two. So those things are at play," said Joanna Kyriazis, senior policy advisor with Simon Fraser University’s Clean Energy Canada, in a phone interview with CTVNews.ca on Tuesday.
On top of that, Kyriazis says more than 80 per cent of the world’s supply of electric vehicles are shipped to consumers in China and the European Union.
China has a strict zero-emission vehicle (ZEV) mandate that requires automakers to ensure that a certain minimum percentage of their vehicles are electric or hydrogen-powered. In Europe, automakers are also forced to sell more electric vehicles there in order to meet the EU’s stringent fleetwide emissions standards.
"We don’t have the same aggressive regulations in place yet to really force automakers to prioritize the Canadian market when they’re deciding where to allocate their EV inventory and where to sell EVs," said Kyriazis.
Kyriazis also said she believes it’s possible that a shortage of lithium and other minerals required for battery production could be a potential issue within the next five years.
"But my understanding is that the global market is not hitting a supply crunch just yet," she said. "There could be a near-term supply issue. But we’re not there yet."
In order to ensure adequate supply of minerals for battery production, the federal government in its most recent budget committed to providing up to $3.8 billion over eight years to create "Canada’s first critical minerals strategy." The strategy is aimed at boosting extraction and production of Canadian nickel, lithium and other minerals used as components in electric vehicles and their batteries.
"Canada has a lot of natural resources and a lot of experience with natural resource extraction. We really can stand to be a leader in battery production," said Harry Constatine, president of the Vancouver Electric Vehicles Association, in an interview with CTVNews.ca over the phone on Monday.
"LOPSIDED" ELECTRIC CAR AVAILABILITY ACROSS PROVINCES
Electric car availability also greatly varies across provinces. B.C. and Quebec are currently the only provinces with ZEV mandates, which has led automakers to prioritizing their electric car supply towards those two regions.
"If we look across Canada, we see how lopsided the EV situation is," Kyriazis said.
The Transport Canada report found that around 60 per cent of dealerships in B.C. and 70 per cent in Quebec had at least one ZEV in stock. It also found that 41 per cent of Ontario dealership had at least one ZEV.
But in the rest of Canada, 82 per cent of dealerships didn’t have a single ZEV in their inventory, the survey found.
"It’s very frustrating for those that don’t live in those two provinces that have ZEV mandates because you just can’t have access to the same quantity of vehicles and can’t have access to the same models as our fellow Canadians in (B.C. and Quebec)," Bernardin said, adding that some models, such as the Toyota RAV4 Prime and the Volkswagen ID.4, are just not being sold in Atlantic Canada.
Some manufacturers are devoting nearly their entire electric car inventory towards those two provinces. More than 80 per cent of the electric cars produced by Volkswagen, Kia and Honda, as well as 98 per cent of Ford’s ZEVs are being allocated to B.C. and Quebec, the Transport Canada survey found.
The federal government is set to implement its own ZEV sales mandate within a few years, as laid out in the most recent federal budget. Ottawa plans on requiring at least 20 per cent of new passenger vehicles and light-duty trucks to be zero-emission by 2026, with a goal of 100 per cent by 2035.
But Bernardin also wants to see regional allocation to be part of the federal ZEV mandate to ensure that automakers aren’t sending the bulk of their electric vehicle supply to two provinces.
"If it’s regionally allocated, then that really does ensure equity between all Canadians," he said.
RELIEF ON THE HORIZON?
With the upcoming federal ZEV sales mandate, as well as new investments from automakers, Kyriazis expects shortages of electric vehicles to ease in the years to come.
"As we’re putting the right policies in place to ramp up critical minerals supply and to help automakers retool their facilities and transition to larger-scale EV production, then the supply chain issues will be short-lived," she said.
Already, automakers have been quickly pouring more and more money into electric vehicle production. Toyota said last December that it would invest C$45 billion into electric vehicles, with the goal of having 30 new zero-emission models by 2030. Volkswagen also has plans to invest $120 billion into electric vehicle tech over the next five years.
Automakers have also been investing here in Canada. Stellantis and LG announced in March that they would be investing $5 billion in an electric vehicle battery manufacturing facility in Windsor, Ont. And earlier this month, GM announced it would turn its Ingersoll, Ont. assembly plant into Canada’s first full-scale electric vehicle plant by late 2022.
"Automakers are able to be nimble and pivot in response to growing demand," Kyriazis said.
Constantine said he believes there may also be a silver lining to the current shortages, as it gives the federal and provincial governments more time to expand the electric vehicle charging infrastructure.
"It’s almost a blessing in disguise," he said. "This kind of supply chain shortage really buys time to get through those hoops of getting charging (stations) into buildings, and also continuing to build out our fast-charging network."
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A woman prepares to plug in her electric vehicle in Markham, Ontario on Wednesday April 15, 2020. THE CANADIAN PRESS/Frank Gunn
