The Canadian automotive industry is voicing its reservations over the federal government’s ambitious zero-emission vehicle (ZEV) sales mandate, which aims to have 60% of new light-duty vehicles sold in the country be zero-emission by 2030, escalating to 100% by 2035. Representatives from major automotive associations addressed concerns during a press conference held at Parliament Hill, shedding light on the challenges hindering the smooth transition.
Tim Reuss, President and CEO of the Canadian Automobile Dealers Association, spoke candidly about the challenges posed by the current economic climate. With high-interest rates and inflation impacting consumer affordability, Reuss argued that mandating EV sales might not be the most effective approach. Rising inventory levels on dealer lots reflect the financial strain on consumers, emphasizing the need for the government to focus on creating conditions that stimulate demand rather than dictating specific purchases.
“While the transition to electric vehicles is progressing well, the government needs to ensure Canadians can afford, use, and charge their EVs according to their lifestyles and geographical requirements,” said Reuss.
Brian Kingston, President and CEO of the Canadian Vehicle Manufacturers’ Association, underscored the industry’s commitment to electrification. Major automakers have invested nearly $15 billion in Canada, with a significant portion dedicated to ZEV assembly and battery supply chain development. Kingston acknowledged the increase in ZEV models but cautioned against micromanaging vehicle sales, pointing out the substantial price gap of $144,000 between internal combustion engine vehicles and electric counterparts.
“The key is addressing affordability and charging challenges for Canadians. It’s not about forcing specific sales targets but creating an environment that encourages the adoption of zero-emission vehicles,” Kingston emphasized.
David Adams, President of the Global Automakers of Canada, echoed the sentiment, emphasizing that meeting ZEV targets requires a comprehensive ecosystem supported by the government. Adams cited challenges such as the lack of charging infrastructure and the need for education and awareness among consumers. He stressed the importance of maintaining ZEV purchase incentives and avoiding luxury taxes until price parity is reached.
Adams called for a collaborative effort in 2024, involving governments, automakers, consumer representatives, and energy providers, to address consumer adoption barriers comprehensively.
All three representatives highlighted the necessity of a transparent and ongoing review process, considering the ambitious 2035 targets. They urged the government to be willing to course-correct if the targets prove unattainable due to external conditions. Adams pointed out that countries committed to a 2035 internal combustion engine ban represent only about 19% of global vehicle sales.
The automotive industry’s concerns underscore the intricate challenges involved in achieving a successful shift to zero-emission vehicles. The representatives called for a nuanced and supportive approach from the government, emphasizing collaboration and flexibility in navigating the complex landscape of electrification. As the industry grapples with economic realities and consumer considerations, finding a balanced path forward remains a critical task for all stakeholders involved.