Canada announces end to gas-powered vehicle sales while demand for EVs dips

The federal government announced their goal to have 100 per cent of all new vehicles sold to be electric or hybrid by 2035, but some polls show demand for them is falling.

Environment minister Stephen Guilbeault announced details of the new Electric Vehicle Availability Standard, with an initial target of 20 per cent of all new vehicle sales being electric or long-range hybrid by 2026.

He says incentives will encourage automakers to increase production of electric vehicles over the next 12 years.

“The new EV availability standard now includes an early credit system to help auto makers comply by encouraging them to get more EVs on the market as early as possible,” said Guilbeault. “As early as next year, and to build more charging infrastructure.”

Data shows that through the first three months of this year, only around 10 per cent of vehicles registered are electric, meaning it needs to double in under three years.

A recent poll from Autotrader.ca shows demand for EV’s has gone in the opposite direction.

“In 2023, 56 per cent of car shoppers who don't currently own an EV are open to purchasing one for their next vehicle, which is down from 68% the year prior,” said Jodi Lai, editor-in-chief at Autotrader.ca.

She equates the change to gas prices, saying when gas prices are higher, interest in electric vehicles is higher.

While inventory for electric vehicles have increased 850 per cent year over year, the top search in almost every province and most sold car in 2023 was a Ford F150.

Lai says the price point for electric vehicles versus gas powered is the main tipping point when cost of living keeps increasing.

“Electric vehicles are still priced in a way that makes them slightly more expensive than their comparable gas powered counterparts,” she said. “And so, because they're more expensive I think that interest is softened a little bit.”

The environment minister says the gap is expected to close by the end of the decade.

“Almost all industry projections show that by the end of the decade at the latest, the purchase price of gas powered and electric cars will be about the same,” said Guilbeault.

Data from Autotrader.ca for Manitoba and Saskatchewan shows the average price of a new vehicle is almost $66,000. For used, it’s almost $39,000. Even with the federal incentive of $5,000, a big gap remains.

Consumers in remote locations like Northern Saskatchewan may be less likely to make the change than in provinces like BC or Quebec who have provincial incentives, but Lai is hopeful that this pushes industry to improve technology.

“A lot of people are concerned about EV pricing and what happens to people in remote areas, but we're forgetting that from now until 2035, the EV technology is going to get exponentially better.”

The federal government will publish details of the new plan later this week.