CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

LATEST MAGAZINE

CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

CANADA'S LEADING INFORMATION SOURCE FOR THE METALWORKING INDUSTRY

Inflation, high interest rates significant challenges for EV adoption: CVMA

Share This Post
Slower than anticipated adoption of EVs will hurt Canadian manufacturers such as Magna who have already taken considerable strides to serve the EV market. PHOTO courtesy Magna.

Inflation and continued high interest rates could hurt the transition to electric vehicles (EVs), according to Brian Kingston, chief executive of the Canadian Vehicle Manufacturers’ Association. In turn, slow adoption of EVs will hurt job shops serving the automotive sector who have already started to transition towards making parts for EVs.

“A vehicle purchase is the second-largest purchase that a household makes after a home,” Kingston said in a recent interview with the Financial Post’s Larysa Harapyn. “If financing rates remain elevated, that will be a challenge for Canadians as they consider a new vehicle and they may push off purchasing a new vehicle for a few years.”

Kingston said the economic headwinds will also hit the industry’s transition to electrification. He believes the federal government’s target of 100 per cent zero-emissions vehicle sales by 2035 is not achievable based on the current supports that are available to Canadians.

Automakers have made significant strides over the past decade in making EV models available in the Canadian market. There were 77 EV models in 2023 and Kingston anticipates 40 more models will be available to Canadians in 2024. There were just three EV models available back in 2012. The federal and Ontario governments have also been aggressive in attracting automaker investments in EV assembly and battery plant, securing multi-billion-dollar deals with Stellantis NV, LG Energy Solution Ltd., Volkswagen AG and Northvolt AB in 2023.

Québec, British Columbia and Ontario lead in the adoption of plug-in electric vehicles, plug-in electric hybrid vehicles (PHEVs) and battery electric vehicles (BEVs), as a result of a comprehensive set of policies aimed at increasing acceptance of these technologies.

The CVMA argues that there is a direct correlation between increased consumer electric and fuel cell vehicle adoption rates in those jurisdictions that provide substantial consumer point of purchase incentives and other consumer supports. Consumers must see a consistent and predictable incentive program in order to have confidence in choosing this vehicle technology and such programs need to be made available until such time as electric vehicles reach price parity with comparable model internal combustion engine vehicles estimated to be in the 2028-2030 period, CVMA says. It also cautions that where a jurisdiction has eliminated or materially reduced the availability of consumer electric vehicle purchase incentives, the negative sales impact is quick and dramatic.

“It’s very important that Canada ties its environmental objectives … to its economic outcomes,” Kingston told the Financial Post. “This industry is hugely important to Canada as we make this transition.”

Share This Post

Recent Articles




Wordpress Social Share Plugin powered by Ultimatelysocial
error

Enjoy this post? Share with your network