EV sticker shock could get even more shocking

The higher upfront cost of ZEVs in the early years is expected to have a disproportionate impact on Canadians unable to afford a ZEV, Environment and Climate Change Canada wrote in Canada Gazette, a federal publication.

COST UP, INTEREST DOWN

Many car buyers are already balking at the high upfront cost of EVs.

A survey conducted in March by AutoTrader.ca found that 68 per cent of respondents did not consider an EV for their next purchase flagged price as a reason.

The survey also showed interest in EVs has dropped: 56 per cent of the roughly 1,300 Canadians polled said they were considering an EV for their next vehicle, down from 68 per cent in the same survey in 2022.

High gasoline prices contributed to a spike in EV interest in 2022, said Baris Akyurek, vice-president of insights and intelligence at AutoTrader.

“Alongside prices, there’s also concerns around range and charging infrastructure gaps,” Akyurek said.

But there is more than the sticker price to consider when comparing EVs to ICE vehicles, said Ekta Bibra, senior policy adviser for clean transportation at Clean Energy Canada. When weighing the total cost of ownership, he said, EVs are already ahead.

Clean Energy Canada, a Vancouver-based think tank, published a report last spring comparing the overall cost of EVs and their ICE counterparts over eight years of ownership. After factoring in the initial price, the cost of electricity versus gasoline or diesel, and savings on maintenance, all but one of the EVs tracked proved to be cheaper than comparable ICE vehicles.

The Ford F-150 Lightning pickup was the sole exception to come in more expensive than its gasoline counterpart.

INCENTIVES NEEDED, FOR NOW

While upfront EV costs are trending down, Bibra said, referring to recent price cuts by Tesla and other automakers, more government incentives will be needed to level the playing field with ICE vehicles in the short term. Provincial rebates to stack with the $5,000 federal EV incentive are available in about half of the country currently.

Addressing Canadians’ preference for larger, costlier vehicles is another priority, Bibra said. She hopes the federal ZEV mandate will help reverse this trend.

“If an automaker is required to make available for sale 60 per cent of their vehicles by 2030 to be electric models, it can’t be making just pickup trucks or just luxury SUVs,” Bibra said. “They have to start making vehicles that all Canadians want. . . at a price point that they’re able to purchase.”

JD Power’s Karwel, on the other hand, said he does not see “any relief in sight” on EV pricing or a shift in consumer preferences as a result of the ZEV mandate.

Over the past 30 years, he said, Canadian consumers have pushed unrelentingly toward larger, heavier and more expensive vehicles. Automakers are “going to fish with a fishhook,” Karwel said, meaning they will simply electrify the larger utility vehicles that consumers are demanding.