Near the close of 2022, Canada put forth a draft proposal that would see a quick uptick in electric vehicle sales. For the first time, dealers and importers could face enforceable mandates to ensure adoption.
As a point of reference, passenger vehicles account for approximately 10% of Canada’s total emissions, a significant portion of which has long been on the radar as a prime opportunity to decrease emissions.
Dealers, in particular, should not ignore the new draft as it outlines for the first time a mechanism that makes it possible to penalize organizations “through a phased-in” approach under the Environmental Protection Act. To enforce compliance, regulators would track the sales and issue credits for ZEV (Zero-Emissions Vehicles) sales.
The new draft regulation stipulates the following sales targets for passenger vehicles:
- By 2026, 20% of all vehicles sales to be ZEV
- By 2030, 60% of all vehicles sales to be ZEV
- By 2035, 100% of all vehicles sales to be ZEV
The projections provided by Transport Canada for Annual New Zero-Emission Vehicles Sales are as follows:
These ambitious targets require massive transformation, especially considering that in 2021, only 5.6% of new sales were ZEVs.
To encourage consumers towards this transition, Canada and some provinces will continue contributing financial incentives towards purchasing ZEVs and supporting the needed infrastructure. Today, a $5,000 incentive is available for consumers and up to $10,000 for businesses. In addition, there is rotating funding for electric vehicle charging stations that can be combined to cover up to 75% of installation costs.
But help is not only available to consumers. Dealers can tap into some of the grants earmarked for infrastructure, especially since they will require high-speed chargers to service electric vehicles. In addition, we have also seen Ford and Mercedes make announcements to develop their own EV charging networks.
With the exciting times ahead come tremendous challenges. At this point, dealers must begin electrifying their sales and building the charging infrastructure needed to service vehicles, instill customer confidence, and demonstrate that they are leaders in the transition.
