Why Ottwa’s EV mandate is a day late and a dollar short
Sales of electric vehicles reached a record high of 8.9 percent last year in Canada, up from just 0.1 percent a decade ago. As sales accelerate, the question arises: Why is the federal government looking in the rearview mirror when it comes to preparing for an electric future?
Canada is currently developing one outdated regulations that will determine what types of vehicles Canadians can and cannot buy. Known as a zero-emissions vehicle mandate, the regulation micro-regulates car sales across Canada with fines for automakers that don’t sell enough electric cars.
Decades ago, mandates were introduced to encourage automakers to produce more EV models. With manufacturers ramping up EV production at an unprecedented rate – over 80 models available to Canadians today with 41 new models coming to market next year – the federal government’s proposal is a day late and a dollar short.
Not only are EV mandates outdated, they don’t work. The world’s leading jurisdictions for the sale of electric vehicles – Norway, Sweden and the Netherlands – have shown that measures to stimulate consumer demand and strict emission standards create the conditions for widespread adoption of electric vehicles.
The Biden administration understands this, which is why the White House has a national EV charging plan combined with the strongest ever federal vehicle emission standards.
A better approach for Canada is to align with the United States’ ambitious emissions standards while ensuring that the major challenges to widespread electrification are addressed. Those challenges include a lack of accessible, convenient EV charging infrastructure and the establishment of a new North American EV battery supply chain.
According to the federal government’s own projections, sales of electric vehicles must grow by more than 200 percent between 2026 and 2030 to meet the government’s sales targets. That would translate to 4.6 million electric vehicles on the road requiring an extensive network of public charging infrastructure.
The federal government is projecting that 195,000 public chargers will be needed to support the EV fleet in 2030. Yet with the same EV fleet goal, jurisdictions like California are building duplicate infrastructure.
Does an EV driver in Abbotsford charge their vehicle less than a driver in Anaheim?
Recent announcements like that of the Canada Infrastructure Bank stake financing 2,000 public fast chargers is a step in the right direction. But the real test will be whether the chargers are reliably operational by the target date of 2027.
Powering this charging infrastructure requires unprecedented investments in clean electricity generation and grid capacity. In Ontario alone, decarbonising the electricity system costs between $375 and $425 billion dollars. According to a BCG studyutilities must invest between $1,700 and $5,800 (US) per EV in network upgrades.
Equally important is the need to accelerate the development of the EV battery supply chain. The federal government, in conjunction with Ontario, has focused on attracting major investment in battery production in Canada. We also need to ensure that the upstream supply chain is developed to give plants the inputs they need.
According to Benchmark mineral intelligence, more than 300 new mines producing cobalt, lithium, nickel and graphite will be needed by 2035 to meet the demand for lithium-ion batteries. And that’s just the first step, raw critical minerals processing is dominated by China. It is estimated that North America will meet only 3.5 percent and 3.4 percent of its cathode and anode needs domestically by 2030, respectively.
If Canada is to meet its ambitious EV sales goals and make the most of exponential demand for critical minerals, our mining and processing capabilities must be ramped up now. Getting this right will not only put Canada on track to meet its electric car sales targets, but will also create a one-time economic opportunity as the global supplier of choice for critical minerals.
The challenges on the way to zero emissions are enormous. They can be overcome with smart, forward-looking policies, collaboration with industry and a sense of urgency.
