Cost of Electric Vehicles Would Have to Drop by 31 Percent to Meet Ottawa’s 2030 Sales Target: PBO

An electric car charging station is seen in Vancouver on Jan. 7, 2017. Chris Helgren/Reuters

The relative ownership costs of zero-emission electric vehicles (ZEV) would need to fall by one-third to meet the federal government’s 2030 EV sales target, according to a new report from the Parliamentary Budget Officer (PBO).

“Assuming that preferences, technology and policies remain unchanged from a baseline scenario without the standard, we estimate that the relative ownership cost of battery‑electric vehicles (BEVs) would need to decrease by 31 percent to meet the ZEV sales target of 60 percent in 2030,” said the report published Aug. 29.

The federal government announced last year that auto manufacturers would be required to ensure the market share of ZEVs sits at 20 percent in 2026, 60 percent in 2030, and 100 percent by 2035.

According to the PBO report, meeting those targets would require the relative ownership cost of ZEVs to fall by 9 percent by 2027, 17 percent by 2028, 20 percent by 2029, and 31 percent by 2030.

To meet the government’s regulations, automakers will be issued credits by the Canadian Environmental Protection Act for the EVs they sell. Manufacturers that sell more EVs than needed to meet each year’s target will be able to bank those credits to meet future targets, or sell them to companies that didn’t meet their targets. Manufacturers can also cover up to 10 percent of the credits they need each year by investing in public fast-charging stations.

The PBO report said that meeting the mandates could require a changing of consumer preferences, new policy measures, price adjustments by auto manufacturers, or “unexpected technology advances.” Additionally, the report said achieving the federal targets would result in the market for L2 and L3 charging ports increasing by 33,900 and 4,700 units, respectively, by 2023.

Environment Minister Steven Guilbeault has described the government’s strategy as “skating to where the puck is going,” saying consumers are increasingly choosing EVs.

According to recent in-house federal research on ZEVs, only 36 percent of Canadians said they had considered buying an electric vehicle, which was down from 51 percent in 2022.

The report found 75 percent of Canadians believed the vehicles are “too expensive,” 59 percent said they perform poorly in cold weather, and 56 percent said they do not travel far enough with a full charge.

The Canadian government has made significant investments in EVs, spending more than $46 billion for 13 electric vehicle, battery, and battery component manufacturing projects since 2020, including subsidies for factories in cities like St. Thomas and Windsor, Ont.

The Liberal government also recently announced it would be placing 100 percent tariffs on Chinese-made EVs, including electric buses, cars, delivery vans, and certain hybrid vehicles, effective Oct. 1. Ottawa said the new measures aim to address China’s “unfair advantage” in the sectors, accusing the country of intentionally generating a global oversupply to undermine Western EV producers.