Canada improving on EV-readiness: report
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Sep 12, 2023
Mehanaz Yakub

Canada moves up four spots to rank within the top 10 nations in EY’s annual EV Readiness Index report

Canada ranks overall ninth out of 20 countries in the latest EV Readiness Index, according to an annual analysis conducted by global accounting firm EY.

Canada moves up four spots to rank within the top 10 nations in EY’s annual EV Readiness Index report

Canada ranks overall ninth out of 20 countries in the latest EV Country Readiness Index report, according to an annual analysis conducted by global accounting firm EY.

The index evaluates nations based on three pillars around the transition to electric vehicles: supply, demand and regulations.

The ninth-place ranking is an improvement from last year when Canada held the 13th position out of 14 countries. This year, EY added six new countries to the ranking, including India, Austria, Australia, Mexico, Singapore, New Zealand and Brazil.

“I think the fact that we’ve moved up four spots, is great. Two years ago we were in a relatively good spot, but last year, it really dropped off,” says Jennifer Rogers, Automotive Leader at EY Canada, in an interview with Electric Autonomy.

“I think the drop-off that occurred last year was probably the result of more actions being taken by other countries and not sufficient [enough action] in Canada. The fact that this year we have moved up is positive. A lot of different countries are continuing to move in this direction and making jumps in this environment.”

The report identifies China, Norway, the United States, Sweden, the United Kingdom and South Korea as the leading countries when looking at their overall EV readiness.

The report further ranked countries under three separate categories based on their supply, demand and regulatory policies.

In the supply ranking, Canada ranked in fifth place, eighth in the demand ranking and 10th in the regulatory policy ranking.

Government regulations to support supply and demand

In the ranking based on regulatory policies, Canada’s 10th position was a one-spot improvement from the previous year.

Canada has set ambitious goals for its transition towards zero-emission vehicles. These include a 100 per cent target for new electric vehicle sales and a net-zero emissions goal for 2050.

“I think this is a pretty aggressive plan, but there’s still lots of movement that needs to happen between now and then,” says Rogers.

Statistics Canada reports that in the first quarter of 2023, zero-emissions vehicles made up 8.6 percent of new vehicle registrations, down from the previous two quarters. Meanwhile, S&P Global Mobility data reveals that ZEV registrations hit an all-time high of 10.5 per cent in the second quarter of this year.

To support the sales goals set in place, Canada, along with other national governments, is actively working to “stimulate demand and supply through purchase subsidies, usage incentives and vehicle electrification targets,” says the report.

The EV readiness report also states that governments are proactively increasing funding, forming partnerships and adjusting investments to promote the growth of battery ecosystems.

Steady Canadian battery supply chain

There has been consistent growth in the global EV supply chain market, marked by an increase in the availability of electric vehicles. This is largely thanks to the “de-bottlenecking of the supply chain and the expansion of financing and leasing services,” driving the global adoption of EVs, says the report.

Canada’s position in the global EV supply landscape remains stable, holding the fifth spot in both the 2023 and 2022 yearly rankings.

“Being the fifth position amongst 20 countries, I think, really is a good position from a Canadian standpoint,” says Rogers. “We have increased investments in the EV manufacturing landscape here. As well as, when you think of some of the critical minerals that are required [to manufacture batteries], that is also something that could be a positive from a Canadian perspective to supply.”

Over the past year, Canada has made significant investments in both EV manufacturing and the battery supply chain. Some examples include the $20 billion, 90 GWh battery cell factory by Volkswagon and the $5 billion, 45 GWh Stellantis battery cell factory — both in Ontario.

These investments are also being supported by the government with incentives and expanding funding this year. The federal government extended a tax credit of US$9.7 billion to Volkswagen and provided an incentive of US$11.2 billion to Stellantis to set up the EV battery plants.

Rogers points out that these incentives played a crucial role in retaining Canada’s meaningful participation in EV manufacturing and the broader EV ecosystem, especially in light of increased competition spurred by the Inflation Reduction Act in the U.S., which also offers substantial incentives to attract companies to operate there.

Greater demand, adding charging infrastructure

Canada has moved up six spots in 2023 to rank eighth in the demand ranking. The report finds there is a growing consumer preference for EVs. This is due to the increased availability of higher-performance EVs with longer ranges and better batteries, the surge in fuel costs and the low cost of ownership associated with EVs.

“We’re still low in terms of the number that we have on the road, but I think the demand continues to be there and it’s just a matter of getting consumers over the line,” says Rogers. “People are leaning towards the purchase of electric vehicles, but I think there are still some barriers that stand in the way of widespread adoption.”

One notable barrier, points out Rogers, is the lack of sufficient public charging infrastructure.

“The convenience factor is not quite there yet, given the limited charging infrastructure that we do have,” says Rogers.

The report reveals that 31 per cent of respondents from 20 different markets express concerns about the availability of charging infrastructure. More government incentives aimed at expanding public charging infrastructure will enhance consumer confidence, says the report.

Canada, Sweden and Japan are highlighted in the report as countries with policy measures in place to support the development of charging infrastructure. One of these measures is the Charging and Hydrogen Refuelling Infrastructure Initiative (CHRI) led by the Canadian Infrastructure Bank (CIB). This initiative aims to collaborate with the private sector to expand the availability of EV charging infrastructure.

In April 2023, the CIB and FLO (a Quebec-based charging network operator) invested $220 million to deploy 2,000 DC charging ports by 2027, through the CHRI.

Natural Resource Canada also has the Zero Emission Vehicle Infrastructure Program that provides funding to deploy EV charging charger stations for owners and operators of ZEV infrastructure.

Facilitating consumer education

Another way the government can have an impact on consumer demand for electric vehicles is by offering incentives to alleviate some of the expenses associated with purchasing an EV.

There is a federal-level zero-emissions vehicles incentive program in place available for all eligible vehicles. However, only some provinces and territories have their own. For instance, Ontario does not offer incentives, whereas provinces like Quebec and British Columbia do.

B.C. even offers incremental incentives for the installation of residential charging infrastructure.

But the information isn’t as readily available as it could be.

“Rather than having to go to 15 different sources to really understand, we should be leading the consumer down the path of, ‘If you live here, here are the things that are available to you,’ and sort of make it in plain English for people to understand, instead of having them piece it together,” says Rogers.

The federal government can play a part in making a more concerted effort to help educate consumers about some of the things that are available to them more clearly, says Rogers. But it must ultimately be a coordinated effort.

“We’ll create more confusion if it’s not a cohesive message. I think that could be an opportunity to try to help move consumers along – I mean, this is a goal that we have as a country, so how do we get there? We can’t just set a goal and not figure out the ways to make it happen,” says Rogers.

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