Critics of electric vehicles are rubbing their hands: ah ha! We told you so. Technology costs too much. Consumers don’t want it. Manufacturers are losing millions. Despite the pitfalls, the electric market is at a historic peak and is even flirting with the point of no return. Government decarbonization targets only require a little steering wheel… First text in a series on the occasion of the Montreal Electric Vehicle Show, which opens Friday: is there fatigue in the automobile market?
In the automobile industry, as in hockey, the torch sometimes has to change hands. The generation of compact sedans gave way to SUVs at the start of the last decade. The Toyota RAV4 has dethroned the Toyota Corolla, we could imagine.
“Shut up, uncle!” » shout electric vehicles today. Because for the first time in history, the most popular new car across the planet is electric. Tesla sold more than 1.2 million Model Ys in 2023 to outstrip the RAV4, which sold 1.1 million copies, and the Corolla, which found 1 million buyers.
A sign of the times, the pulse of the automobile industry now beats to the rhythm of electricity. The most captivating fight of the moment is between two electric car manufacturers: Tesla and BYD.
Temporary fatigue
In 2023, the best-selling light vehicle on Earth was the Model Y, Tesla’s most affordable wagon. At the same time, the Californian brand is competing for first place among the largest manufacturers of electric vehicles with BYD, a Chinese company partly owned by American interests, with Warren Buffett’s Berkshire Hathaway in the lead.
BYD (pronounced “Bi-ouaille-di”, the expression “ Build Your Dreams » is a derivative of this acronym after the founding of the company) said to have sold 526,000 electric vehicles during the last three months of 2023. Tesla had to be content with 485,000 sales during the same period. The American brand still sold 1.8 million electric vehicles in 2023 — more than any other manufacturer.
Tesla nevertheless seems to be slowed down by a capricious global economy and high borrowing rates. Its plan to launch a new, very affordable vehicle, at US$25,000, is in trouble. Competition is more active, too, which reduces its market share.
Tesla is not alone in delaying: Ford has postponed the production of its next generation electric vehicles planned at its Oakville, Ontario factory from 2025 to 2027.
This news, inevitably, is worrying. Investors are hesitant. There is water in the gas, as they say. Tesla reacted by rationalizing: 10% of the workforce will be cut. Never good news…
Yet an unprecedented number of electric vehicles have been sold in the past year. Their market share, at 13.3% in 2023, is an absolute record. At this rate, the North American objective of electrifying half of light vehicle sales in 2030 would easily be surpassed.
A reputation to rebuild
So what’s wrong?
The first buyers were in a hurry to abandon the thermal engine. The next buyers have other priorities, notes Luc Saumure, promoter of the Montreal Electric Vehicle Show. “There was a first wave of buyers which is now satisfied,” he explains to Duty. There, we must convince a new wave of buyers who are more difficult to capture. »
For the Montreal Electric Vehicle Show, which opens Friday in an Olympic Stadium deprived of its playing surface, that’s a good thing: manufacturers are more generous. There are more of them and they present more new models: Dodge Charger EV, Fiat 500e, Polestar 3, Volkswagen ID.7…
Even Tesla, which abandoned its public relations department years ago, is giving a helping hand. Tesla Canada is providing vehicles for the public to drive, and will be displaying its Cybertruck pickup truck with the doors wide open. This is a Canadian first — the Cybertruck exhibited elsewhere in recent months kept its doors closed.
This outburst of altruism comes at just the right time for Luc Saumure and his organization: he expects a good crowd at his salon. The announced reduction in provincial purchasing assistance from 2025 could encourage motorists to rush their purchase of a new electric vehicle. Quebec rebates up to $7,000 on certain models purchased before the end of 2024. It will be $4,000 in 2025 and 2026, then $2,000 in 2027.
“The craze should continue in the coming months,” predicts Luc Saumure. It is from next January that we will perhaps see a drop in demand, unless manufacturers adjust their prices. »
Lower prices? It’s not impossible. Quebec is reducing its purchasing assistance, but its sales thresholds for electric or electrified vehicles will continue to increase, until the total electrification of sales in 2035. To avoid costly penalties, manufacturers will have to find the way to attract consumers, even the most reluctant.
Another rhythm for recreational
The electrification of transport is planned in several stages. Commercial vehicles have five more years to achieve this, until 2040.
Recreational vehicles follow their own pace. Motocross bikes, all-terrain vehicles and other electric watercraft generally provide an experience greater than their simple utility. Paying more for a less efficient vehicle puts off more than one thrill-seeker. This partly explains the pain and misery of specialized manufacturers like Taiga Motors.
Apollo Motors, of Saint-Laurent, northwest of Montreal, thinks it has found the right spark plug. In addition to its gasoline-powered off-road motorcycles, there is an all-electric model that saves its owner from further expenses. This new motorcycle can be driven on public roads, which avoids having to buy a trailer or a second vehicle, explains Alexandre Lemay, founder of Apollo Motors.
“Young people often buy a motocross bike for the trails, then a scooter for the road. There, they only have to buy one motorcycle. It therefore replaces two vehicles,” he says.
Apollo Motors sells 5,000 vehicles annually. Its goal is to sell 1,500 electric motorcycles this year, to reach 5,000 sales per year within three years. “The demand is really there,” assures its marketing director, Jean Plouffe. There is a little resistance to start, but that’s normal, it’s the start of a new cycle. »
We are not reinventing the wheel, we conclude at Apollo Motors. We’re just electrifying it.