Canadians are ready to switch to electric vehicles, but multinational car companies are slowing the transition.
Posted at 3:00 p.m.
Representing a quarter of our annual emissions, the transportation sector is the second largest source of pollution in Canada. If Canada is to meet its climate goals, 100% of all new vehicles sold must be electric by 2035.
This target was confirmed by Canada in a joint statement at COP26 in Glasgow. The time has come to put in place the necessary policy measures to ensure a rapid transition of the automotive industry towards this objective.
Automakers love publicly committing to zero-emission vehicles (ZEVs) because it drives their stock prices higher. But behind the scenes, they are fighting against regulations that would force them to meet their climate commitments through their associations.
In short, while Canadians are ready to make the switch to ZEVs, automakers are holding them back.
According to a recent Abacus Data poll commissioned by Environmental Defence, Équiterre, Ecology Action Center and the David Suzuki Foundation, 70% of Canadians indicated that long waiting times discouraged them from buying a ZEV.
Canadians want electric vehicles, but just can’t get their hands on them. Just last year, the majority of Canadian car dealerships (55%) reported not having a single electric vehicle in stock, and nearly two-thirds (64%) of dealerships reported wait times of three to six months for orders for an electric vehicle.
These wait times have worsened since the significant increase in gas prices and reports now indicate that waiting lists are stretching up to three years.
Federal strategy
Fortunately, the Government of Canada has a strategy to meet its zero-emission vehicle sales targets and address this supply issue. It intends to adopt a regulation called the “zero-emission vehicle standard” (commonly referred to as the “ZEV standard”).
This standard sets clear targets for electric vehicle sales and penalizes automakers that fail to meet them or, in other words, redirect their business plans to an emission-free future fast enough.
The federal government is not the first to adopt this strategy: Quebec, British Columbia, California and 15 American states have all implemented this type of regulation, and the United Kingdom will do the same from 2024. .
According to the same Abacus Data poll, the majority of Canadians (58%) support this plan and want the federal government to intervene by imposing financial penalties on automakers that do not meet the sales targets set.
To reach these quotas, manufacturers can increase their investments in the production of ZEVs, by spending more on research and development, or directly lower the price of ZEVs, but the latter option would imply a reduction in their profits. Canadians overwhelmingly support these consequences of adopting a ZEV standard: 83% of people support increased investment and 84% of people support fairer access to ZEVs across Canada. Finally, 84% and 86% of people support lower prices.
Profits are at the heart of the debate on the way forward to reach the 2035 target. Today, automakers set their prices and allocate their investments by thinking about what earns them the most: sport utility vehicles ( SUVs) and pickup trucks with higher profit margins. However, these vehicles are harmful from an energy point of view.
Automakers would rather sell a gas-guzzling vehicle than an electric car because they make more money that way.
Furthermore, the automobile lobby is actively opposed to the adoption of a ZEV standard, as it would disrupt its business plans aimed at maximizing its profits.
It is clear that Canadians care more about the future of the planet than the bottom line of multinational auto companies. According to the same Abacus poll, 74% of Canadians believe that manufacturers have a responsibility to direct their production towards zero-emission vehicles and to abandon gasoline-powered vehicles, even if this means reducing their profits along the way.
It is fair to ask that polluters pay their fair share in the transition to a clean economy. They can certainly afford it. Last year, the “Big Three” of the North American auto industry, Ford, Stellantis and General Motors, collectively made $41.5 billion in operating profits.
General Motors even announced recently that it was going to buy back $5 billion of its own stock and increase its dividends instead of accelerating investments in ZEVs.
As for foreign manufacturers, Toyota and Volkswagen made profits of $25.1 billion and $27 billion respectively.
The federal government must not delay the adoption of a ZEV standard or bow to pressure from auto industry lobbyists who want the plan scrapped. We have to stand up to them like Quebec and British Columbia have done. We cannot let the greed of the auto industry stand between us and a sustainable future.
* Co-signers: Thomas Arnason McNeil, Climate Policy Coordinator at Ecology Action Centre; Nate Wallace, Clean Transportation Program Manager at Environmental Defense