Stimulus from federal incentive offset by automaker supply shortages and a weaker overall market

Zero emission vehicles now make up 3.5 per cent of all passenger vehicles sold in Canada, according to Electric Mobility Canada’s just-released data for the third quarter of 2019.

Canadian buyers purchased more than 16,000 ZEVs from July through September (the ZEV category includes battery-electric, plug-in hybrid and fuel cell vehicles). This was down more than 17 per cent from the second quarter but represents a 25 per cent increase over the same period in 2018.

Regionally, market penetration is greatest in British Columbia, where one in 10 vehicles sold are ZEVs, and in Quebec, where they have a 7 per cent market share.

Purchase incentives key

EMC notes that the market growth to 3.5 per cent coincides with the introduction of a federal purchase incentive through Transport Canada’s iZEV program at the beginning of May.

Additional provincial incentives in B.C. and Quebec as well as policy mandates requiring ZEV market share growth are key factors in the strong sales there, it says.

Tellingly, the only province to register a drop in ZEV sales in the latest quarter compared to 2018 was Ontario (3,127 ZEVs sold versus 5,609 in 2018), which reflects the cancellation of the province’s purchase incentive program in the summer of 2018.

Supply an issue

The member-based national industry organization attributes the drop in total sales in the third quarter compared to the second quarter of 2019 to “automakers’ ongoing challenges of meeting vehicle supply.”

This matches a similar trend in the U.S. market, where ZEV sales in the third quarter were actually down 20 per cent compared to the same period in 2018. Analysts there blame a lack of new, pure-electric vehicle models as well as a slowing economy.

Model availability is less of a concern in Europe, where ZEV sales are surging — up more than 50 per cent in the third quarter of 2019 versus the same period in 2018. Major factors driving growth there are tightening EU restrictions on car emissions and diesel bans in certain cities.

Significant threshold

With national ZEV sales hitting the 3.5 per cent threshold, EMC notes that combined ZEV sales are now on a par with sales levels of the Honda Civic and Toyota RAV4. The latter vehicles are Canada’s car and SUV segment leaders.

The overall market leader in Canada, Ford F-series trucks, has an 8 per cent market share. EMC speculates that with the expected growth in the number of vehicle models available in plug-in hybrid and battery electric formats in the next couple of years, “ZEV sales could approach Ford F-series levels early in the coming decade.”