I normally avoid making New Year’s predictions, but I feel confident in predicting that electric vehicles will continue to dominate the headlines and automakers’ agendas throughout 2018.
There is no question that EVs will continue to gain market share as automakers perfect battery technologies and as consumers come to feel more comfortable owning these vehicles.
The subject of EVs was a prominent topic of conversation during my recent trip to China. The China Automobile Dealers Association invited Canadian provincial and national auto associations to its annual conference and to tour local dealerships.
I discovered that China faces the same sort of EV challenges as elsewhere in the industrialized world. For instance, EV sales in China in 2016 represented only 1.5 per cent of the new vehicle market. In Ontario, the percentage has moved up from 0.7 per cent to 0.8 per cent in Q3 in 2017, and in the U.S., it’s just over one per cent.
From a consumer perspective, one of the challenges for EVs is charging time trauma. Internal combustion engines require five minutes to fill up at a gas station, while EVs can take up to an hour at a regular charging station, and most EVs require an overnight charge.
The Ontario government has been aggressively promoting the EV market, but their motives have come under attack in the media. In 2016, the government announced an EV target of five per cent of vehicles purchased or on the road by 2020, but most experts agree this is unrealistic. Nobody can predict what the EV market will look like in five or 10 years.
The lag in sales is partly the result of range anxiety, confusion about EVs among consumers, inadequate marketing, the cost of replacement batteries, and other issues.
Range anxiety is a big concern for motorists who are considering an EV: In 2016, the Ontario government announced that it would build 500 public charging stations by March 2017. To date, only two thirds of those stations are operational.
Plus, some lithium-ion battery packs can be pricey to replace (estimates range from $15,000 to $40,000, depending on the model), although to be fair, battery replacements are rare, and when they do need replacing, they may be covered under warranty.
While the Ontario government has ambitious plans for EVs, the TADA questions the long wait times (up to six months, in most cases) for some dealers to receive the incentive rebate on EV sales. Most dealers will provide the incentive amount on the bill of sale so the consumer enjoys the lowest price upfront. The said dealer would then complete the paperwork and get reimbursed the incentive amount.
Another issue is how the move to more electric vehicles will affect the electrical grid. Can the utilities withstand the additional load? How will peak demand impact the grid?
Perhaps the most unanswered question around EVs centres on the environment: What is to be done with the thousands of 1,000-pound lithium-ion batteries after they wear out? Currently, there is no nationwide program in place for the recycling of lithium-ion batteries in an environmentally friendly way.
With the small number of EVs on the road and given the fact that EVs last 10 years on average, we are still years away from requiring such a program.
Despite the many challenges faced by automakers and governments to grow the EV market, I believe that the segment will gain wider acceptance among car buyers in the next few years.
This column represents the views and values of the TADA. Write to [email protected] or go to tada.ca. Larry Lantz is president of the Trillium Automobile Dealers Association and is a new-car dealer in Hanover, Ont.
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