What is the Governments Role in Electrification?

Nisha Patel of CBC talks about Why advocates say Canada needs to rev up its electric car adoption. Advocates are typically biased. What do they have to say?

When Judy Goodwin wanted to test drive an electric car, she didn’t head to a dealership. “They’re hard to come by,” she said of electric vehicles (EVs). “My sister tried to buy one and she couldn’t find one that was available.”

There are three reasons this might happen. The first is regulation, which can presumably be ruled out since government is trying to encourage EVs. The second is supply. Since Chevy’s Bolt and Nissan’s Leaf have been around for years, its hard to believe that if the demand was there, the companies wouldn’t have scaled up manufacturing. That leaves demand. With the higher cost of EVs, even with government subsidies, I can believe that demand is still very low.

Instead, she went to a non-profit facility in north Toronto called Plug’n Drive. Not only does Plug’n Drive have a showroom where people can test drive zero-emissions vehicles (ZEVs), its staff are also trained ambassadors who will answer questions about how to charge the vehicles, their range and their costs. Plug’n Drive, which seeks to accelerate the adoption of EVs in Canada.

Sounds like things are still in the technology enthusiast state. I see a lot of Tesla’s in Vancouver, where relatively warmer temperatures make them more practical, at least for city driving. However, even here, even our mild winter reduces the range of electric vehicles by 30%. The problem with Tesla’s are their high cost.

Whether driven by high gas prices or a sense of climate change-fuelled urgency, more Canadians are thinking about making the switch to electric vehicles (EVs). According to a recent survey by KPMG, nearly 70 per cent of Canadians planning to buy a new vehicle in the next five years are likely to buy electric.

Will they be able to afford to? This is a Crossing the Chasm moment for EVs. Mass adoption will drive lower costs, but will require charging infrastructure. At some point, cost and availability of infrastructure will reach a tipping point, and then mass adoption will occur.

We saw this with DVDs, which reached the magic $500 price point and exploded onto the market because the cost of producing discs was also reduced to the point where they were affordable. The same could not be said for laservision players, whose media never dropped below $100 a pop. Hybrids live in a similar place, forever stuck on the far side of the chasm.

But at the same time, electric cars made up just under four per cent of all vehicle sales last year — even as Canada set a mandatory target for all new cars and light-duty trucks sold in the country to be zero emissions by 2035.

This leaves 14 years for electrics to cross the chasm, or for some other technology (hydrogen, perhaps) to take their place. I would put money on EVs, but there are going to be applications that they just aren’t suited to. That will leave people who need or want the range and ability to travel completely of the grid either buying used, or upgrading to heavier duty (and higher polluting) work grade vehicles. Perhaps gasoline will be replaced by electric and diesel for a time.

Nearly two-thirds of dealerships in Canada do not have a single electric vehicle available to purchase or test drive, according to a 2020 study commissioned by Transport Canada. Now with the pandemic causing issues in the supply chain, it has become worse.

If they had large numbers of customers walking away because of this, they would be working hard to make sure they had electrics. I bought a used vehicle last year, and was surprised to hear that my Ford dealer could hardly keep vehicles in stock. This was before the supply issues with new vehicles.

Merran Smith, executive director of Clean Energy Canada, a program housed at Simon Fraser University says the federal government needs a strong, national mandate around zero-emissions vehicles, requiring the country’s car dealerships “to have the cars and to sell a certain percentage of [electric] cars.”

The government should not be forcing businesses to sell a certain product. What will the government do if a dealer doesn’t meet the quota? Fine them? Canada is not (yet) Soviet Russia.

While prices for zero-emission vehicles are falling, they remain more expensive than their gas counterparts — as much as $20,000 more, according to a recent TD report. The cheapest EV on the market, the 2022 Nissan LEAF, comes with a price tag of $37,498 before discounts.

And with used EVs almost impossible to find, this means they are out of range for all but a monied few. In my case, I bought a 3 year old Ford Edge, and with trade in, paid just over $20K. I was able to pay for part of the vehicle in cash, and still, the monthly payments make a noticeable dent in the monthly cash flow. Those who are living pay-check to pay-check are not going to be buying EVs any time soon.

The federal government offers a rebate of up to $5,000. Smith said those incentives should continue until there is cost parity between electric and gas-powered cars, and they should also be targeted to low-income families.

Low income families don’t buy new vehicles. Smith is completely out of touch with the average person.

“They often are the ones that can’t quite afford that extra $5,000 or $10,000 that it’s going to take to get the EV. But they’re the ones that are going to benefit from the savings,” she said.

What savings? Any savings in running an EV are going to be eaten up by higher loan payments, higher repair costs, and high costs for parking in a location that provides charging. Low income earners are typically exactly the people who have the longest commutes, and will need to charge their vehicles during the day for the return trip home after work.

Meanwhile, provincial rebate programs vary widely. Ontario, Alberta, Manitoba, Saskatchewan and Nunavut currently don’t offer incentives to purchase new zero-emission vehicles, but the other provinces and territories have strong programs. And the numbers suggest incentives work: Quebec and B.C., which each offer healthy EV incentives, also lead the country in electric car adoption.

It’s not surprising that when the government uses tax revenue to subsidize a business, that business is more successful.

Another roadblock to adoption is the availability of infrastructure for charging electric cars, whether the driver is going on a road trip or lives in a crowded urban centre. According to Natural Resources Canada, there are over 6,000 publicly available charging stations across Canada, but some 12,000 gas stations.

And a gas station can typically handle many cars at once, and filling time is a fraction of the time required to charge an electric vehicle. Road trips are especially problematic, since if all charging stations in your remote location are in use, you may not be able to return home.

During the recent federal election, the Liberals campaigned on a platform that included spending an additional $700 million to create 50,000 new electric- and hydrogen-charging stations. If the government makes good on that promise, it would give Canada’s infrastructure a big boost.

Why is the government building these stations? I would rather they build better transit. Why are they building hydrogen charging stations at all? Hydrogen fuel cell vehicles make EVs look cheap by comparison. We don’t need more infrastructure for the rich that’s paid for by the poor.

Companies are also tackling the infrastructure issue. General Motors recently announced plans to install 4,000 charging stations in Canada as part of its plan to invest more heavily in electric vehicles.  

Good for GM. It’s in their interest to do so, since with the Bolt, they currently have the jump on much of their competition.

“We’ve got Canadian companies champing at the bit,” said Smith. “We’re going to see more and more of this in the energy transition; new jobs, new opportunities for businesses as we shift off of fossil fuels onto an electric system.”

Smith is probably right, though it may be that hydrogen wins in the end. Rather than wasting tax revenue on pushing the rope on a change that will happen when it’s viable, the government should focus on things that companies are bad at. These are common infrastructure, like transit, that benefit all people. Charging infrastructure could be communal, but I’m pretty sure that would not be the most effective way to do it.

About jimbelton

I'm a software developer, and a writer of both fiction and non-fiction, and I blog about movies, books, and philosophy. My interest in religious philosophy and the search for the truth inspires much of my writing.
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1 Response to What is the Governments Role in Electrification?

  1. Our parents bombed nazi and imperial dams, power plants, oil refineries and storage, power stations and coaling facilities because one does not want deadly enemies to convert energy in wartime. The anti-energy movement loathes and attacks all non-communist energy, and is simply accomplishing through brainwashing and the violence of law what it dare not attempt by military attack at this time. This has been going on before my eyes since the 1974 Global Cooling scare, and probably earlier.

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