Lasting trend reversal or circumstantial craze? Electric vehicles (EV) are experiencing a strong gain in popularity in purchase intentions. Should we see in this a first effect of “destruction of demand” generated by the surge in gasoline prices?
In 2020, due to the pandemic, Canadians were for “Budget first” – this concern concerning 31% of respondents to an EY survey – then for “Health first” (26%), sensitivity to the planet being a priority for 16% of respondents.
In the October 2021 edition of the survey, EY talks about an attitude that has shifted decisively from an orientation towards individual health and financial capability to one towards personal well-being and the imperatives ecological. The planet moved to the top of the agenda, shared by 26% of respondents, compared to 25% for concern directed towards affordability or price levels.
With soaring gas prices fueling inflation, 46% of car buyers are now looking to EVs, a peak and up 11 percentage points from 2021. Canada, it is true that interest in EVs is below the global average of 52%, but it exceeds purchase intentions in the United States (29%) and Australia (38%). We should add, however, that the intentions vary from one region to another. Respondents from British Columbia (54%) and Quebec (51%) expressed the most interest […] while the Prairies showed the least interest in this regard (25%)”, explains the firm EY.
Environmental motives?
We are pleased to see that environmental motivations are intensifying. Although the initial purchase price remains the main obstacle for 38% of respondents, this reluctance reached 66% last year. And more of them say they would pay more. Among them, 80% confirm that they are willing to pay a supplement and almost two thirds of consumers would not mind paying up to 20% more, we read.
However, while 38% of potential future EV buyers mention the environmental factor, 37% mention the increase in costs associated with internal combustion vehicles, which is not unrelated to the rise in prices at the pump. And despite the good intentions, it is mentioned that there is still a lot to be done to put in place the required charging infrastructures. The capacity and speed of charging, as well as concerns about the range of EVs, discourage buyers. Add to this the distortions and disruptions in the supply chain, which multiply the delays and shortages, and the questions concerning the raw materials and the volume of the batteries.
Globally, a survey released in May found that more than half of respondents (52%) who intend to buy a car say they will go for all-electric vehicles, plug-in hybrids or hybrids. This is an increase of 11 percentage points compared to 2021 and 22 points compared to 2020.
Public transport, the loser
However, sensitivity to the environment stands out less. The reasons mentioned relate firstly to the increase in teleworking and the hygienic risk, which penalizes public transport and shared mobility. “If the car — especially the EV — is the ‘winner’ in the minds of consumers, public transport is surely the loser,” writes EY. Business travel by public transport is down 15% globally from pre-COVID-19 levels, and it’s a trend across all three major regions: Asia-Pacific, Europe and North America. Business trips by public transport fell by 35% in Australia, 30% in Canada and 29% in Italy. “Of the 18 countries in the survey, only one — India — reported a slight increase in public transport use, up 1%.”
With regulation helping, the EY Mobility Lens Forecaster predicts EVs will dominate sales of all other powertrains by 2033, five years ahead of schedule, the firm continues.
That said, from a Canadian perspective, the CD Howe Institute indicated in July 2021 that 7.7 million zero-emission vehicles should be on the roads in 2030, or the equivalent of 30% of all vehicles, if Ottawa wants meet its GHG emission reduction targets in the transportation sector. There were 202,000 in December 2020. According to Statistics Canada, the number of new zero-emission vehicle registrations reached a significant milestone in 2021 at 85,600, and it represents 5.2% of all new motor vehicle registrations. .