Even as passenger-vehicle purchase incentives multiply, only B.C. and Quebec offer similar incentives for large trucks. Yet electrifying commercial fleets could be the fastest way to lower emissions from transportation

While more electric truck manufacturers are starting to roll out heavy-duty vehicles catered to meeting the needs of commercial fleets, purchase incentive programs for those vehicles from Canadian governments are scarce. In the race to reduce emissions, getting medium- and heavy-duty diesel trucks off the roads is a crucial component, but is one of the slowest transitioning areas in transportation.

For Canadian commercial fleet managers looking to transition from combustion to electric rigs the process remains a long haul.

“The focus for a lot of governments across the globe has been on the light-duty passenger market,” says Jessie Lund, senior associate with RMI’s carbon-free mobility program, in an interview with Electric Autonomy Canada.

RMI is a global nonprofit organization, based out of the United States, dedicated to advancing clean energy. An element of its research includes studying the transportation sector across North America. They are one of the few organizations that hold data on commercial heavy vehicle fleet electrification in Canada. Lund says while change has been slow, there is momentum building and putting heavy-duty vehicle rebates into play is becoming a political ambition.

From an emissions perspective, it certainly makes sense. Several years ago, freight emissions accounted for an estimated 10.5 per cent of Canada’s overall GHG emissions. In 2020, the Pembina Institute estimated that by 2030, emissions from heavy trucks will exceed emissions for passenger vehicles.

“If we can reach this relatively small group of decision-makers as compared to every individual who’s making a car purchase, there is a huge opportunity”

Jessie Lund, Senior Associate, Rocky Mountain Institute

Beyond that volume, converting fleets also holds the promise of faster impact than turning over one passenger vehicle at a time.

“I think a lot of policy makers and regulators are waking up to this idea of, if we can reach this relatively small group of decision-makers as compared to every individual who’s making a car purchase, there is a huge opportunity there,” says Lund.

Nowhere to go but up

The current status of electric trucks on the road in Canada is, bluntly, nearly non-existent.

New data from the International Council on Clean Transportation, looking at heavy-duty trucks greater than 8,500 kilograms gross vehicle weight, shows the following market-share breakdown in 2020:

• Zero emission accounts for 0.000 per cent
• Hybrid electric accounts for 0.002 per cent
• Propane accounts for 0.0002 per cent
• Natural gas accounts for 0.2 per cent
• Gasoline accounts for 37 per cent
• Diesel accounts for 63 per cent

“In 2020, the United States and Canada accounted for 1.2% of global zero-emission bus sales and 1.7% of zero-emission truck sales,” reads the report.

Overall, according to Statistics Canada, which uses different weight categories, there were more than 1.1 million trucks weighing 4,500 kilograms or more registered on Canada’s roads (4,500 to 15,000 kg: 633,663; over 15,000 kg: 488,902) in 2019. Alberta led in registrations (192,708; 111,415), followed by Ontario (134,789; 134,202), B.C. (135,691; 46,247), Quebec (65,052; 88,277), and Saskatchewan (49,705; 43,138).

That’s huge potential, provided government policy, product availability, corporate motivation and public will can come into alignment.

Provincial truck rebates

When it comes to trend-spotting in Canada’s EV space, most heads turn west to B.C. or east to Quebec. These jurisdictions are routinely top of the class when it comes to rebates, adoption rates and charging infrastructure.

And to date, they are the only provinces offering rebates on large electric trucks: up to $100,000 in B.C. for medium- and heavy-duty trucks, and $175,000 per vehicle in Quebec for heavy-duty trucks. The rebates are part of B.C.’s CleanBC Go Electric Specialty Use Vehicle Incentive (SUVI) program and Quebec’s Ecocamionnage program.

B.C. has been running its SUVI program since 2017, but it reports a marked uptick in interest in the past year.

“The kind of inquiries and interest and questions coming are very optimistic,” says Dr. Pete Thimmaiah, program manager for the Fraser Basin Council’s climate change and air quality program, in an interview with Electric Autonomy Canada. Thimmaiah is the point person for B.C.’s SUVI rebate program and is responsible for advising companies making enquiries about the rebate and approving applications for funding.

“When SUVI started it was not like this, but from 2020 onwards there has been considerable interest and I think the next three to four years things will change dramatically in B.C. I think this is going to be a big success.”

Outside of B.C. and Quebec, there appears to be a demonstrated hesitancy among provinces to offer rebates to electric truck purchasers.

Electric Autonomy Canada contacted Ontario, Alberta and Saskatchewan to inquire about any current of future plans for the province to offer a commercial truck purchase rebate. All three provinces confirmed they do not have any current rebates, nor are there any plans to establish purchase incentive programs.

Alberta reported that, as of March 31, the province had “2,280 electric vehicles registered…, six of which were trucks, and one of which was a large truck over 4,500 kgs,” according to an Alberta Transportation spokesperson.

Ontario and Saskatchewan declined to provide figures without a formal access to information request.

Supply, demand both growing

In 2020, there were roughly 70 electric freight vehicles from 24 companies available in North America, ranging in size from C-series through to Class 8 (the largest semi-trucks), according to data compiled by RMI. In 2021, that number is expected to leap to 85 models offered by over 30 different companies. Many of these zero emission freight trucks — from makers including Volvo, Kenworth Peterbilt and Workhorse — are slated to enter production throughout 2021.

On the purchaser side, Group Morneau recently announced it purchased Volvo’s first 10-wheel electric tractor truck sold in Canada, which will be deployed in Quebec. Elsewhere, Metro Supply Chain Group is taking delivery of six electric trucks this fall — three from Quebec’s Lion Electric and three from BYD — and they will be on the road in Quebec and B.C. Second Closet logistics company, too, in conjunction with its delivery client Ikea, will be adding 16 heavy-duty electric trucks to its fleet in Quebec, B.C. and Ontario. Mosaic Forest Management in B.C. announced earlier this year that it will be piloting Tesla Semis in its logging operations on Vancouver Island once Tesla starts production and begins delivering its trucks.

Frans Tjallingii, CEO and cofounder of 7 Generation Capital (7Gen), a Vancouver-based company created last year to offer turnkey consulting, equipment sourcing and financing services for commercial clients looking to electrify their fleets, says the interest level is much higher than current adoption rates might indicate.

“Most clients that we talk to understand that electrification is a wave that’s coming. So we have no lack of engagement,” says Tjallingii. Right now, however, the economics and vehicle availability tend to favour certain sectors and applications.

“One is last-mile delivery. And the other is the garbage trucks,” he says. “Those are two focus areas where we believe it makes a lot of sense to electrify. In those two segments today, it already makes sense financially, especially if you’re in B.C. and Quebec [due to the incentives].”

Prospect of federal incentives

Wrightspeed is a San Francisco-based electric powertrain company looking to expand into the Canadian market because of the high growth potential in the truck and bus electrification sector. Gilbert Passin, Wrightspeed’s chief operating officer, tells in an interview with Electric Autonomy Canada. Wrightspeed is currently in active talks with an unnamed B.C. company looking to electrify its fleet.

“There are not that many heavy duty electric vehicles on the market right now, that’s true,” Passin says. “There are probably a little bit more in the U.S. than in Canada, but I think what we will see [in Canada], like in the U.S., the government giving incentives to greatly increase the adoption of EV.”

There are signs of potential federal interest. SUVI’s Thimmaiah says his group recently participated in a federally led forum on the topic “because the federal government also wants to implement something on the medium and heavy-duty vehicles. They were asking about the challenges we faced in the implementation of SUVI.”

If so, it is an encouraging sign for fleet managers looking to transition, says RMI’s Lund. If nothing else, knowing the government is considering this as an option indicates to fleet managers that transitioning is something they should be educating themselves on for if or when the day comes. And on the policy side, Lund believes the benefits to getting an incentive in place for heavy duty vehicles sooner than later speak for themselves.

“If you’re a policy maker and you want this in your community, if you want air quality improvements and lower greenhouse gas emissions disruptions to help you achieve your climate goals, this is something that you should be looking at.”