The Canadian government has currently set a goal to be zero emissions by 2050. In order to accomplish this ambitious, yet necessary, goal they have chosen to push automobile manufacturers to think innovatively by phasing out petroleum powered vehicles. The government of Canada recently established a deadline for all automobile manufacturers in Canada to become zero emissions. The goal- all new cars and light duty trucks sold in 2035, and beyond, must be zero emissions. Prior to the government releasing this deadline in June 2021, the regulations dictated that all passenger vehicles must be zero emissions by 2040. Given this, the Canadian government is moving up the timeline on their goals and pushing forward as other governments across the globe do the same to offset climate change. There undoubtedly will be lots of changes happening in the next decade to get Canada ready to move towards zero emissions vehicles. But what does this mean for you and the automobile industry as a whole? Let’s discuss it.
What are Zero-Emissions Vehicles?
On a very basic level, a zero-emissions vehicle is a vehicle that does not emit emissions and therefore has no potential to pollute the environment. At this time, the most common and readily available zero emissions vehicles are electric vehicles. Although there are other types of vehicles that are entering the market (hydrogen fuel cell vehicles), they are not as common at this time (but are certainly up and coming). Electric vehicles are widely available now and are becoming a common thing to see on roadways across the world. Arguably, all automobile manufacturers are offering an electric vehicle of some kind in their fleet, as the market (and the government) demands the shift.
What should be noted is that this shift to zero emissions vehicles in 2035 is only relevant for newly purchased cars. All petroleum powered vehicles sold between now and 2034 will still be able to operate on Canadian roadways until their eventual demise. The government has made the decision that this ‘eventual demise’ of the petroleum vehicle will be by 2050. This will make the shift towards zero-emissions vehicles gradual, until they are accessible by everyone at all price points. The only thing that may become scarcer are fueling stations.
Changes to the Market: Gas to Electric Plug-in Stations
As the number of electric vehicles on the road increases, you will naturally see a reduction of available gas stations, as their need will slowly decrease. In place of gas stations, there will be a natural increase of available charging stations for electric vehicles or hydrogen stations for the hydrogen fuel cell vehicles. Obviously, this is going to hit gas stations, and the oil/gas industry quite negatively and reinforces their eventual phase out. However, there are undeniable environmental consequences to utilizing petroleum and therefore there is a logical argument for their phase out. This will absolutely be one of the most interesting factors in the market switch from petroleum to zero-emissions. Will gas stations switch to zero-emissions alternatives to stay profitable?
Even though all new cars and light-duty trucks will need to be zero-emissions by 2035, they have yet to release data on heavy duty trucks. This will keep the need for fuel stations open, mostly for diesel, until the government sets targets for those types of transportation methods as well. With the transportation industry contributing high amounts of emissions, this will be on the Canadian Government’s radar in the coming years.
Canadian Government Targets
In order to reach their goals in 2035, the government of Canada has set targets to ensure the market is ready for the shift. Currently, their first target is set for 2025, where they aim to see 10% of new car sales being zero-emissions. This goal is critical to developing the proper market buy-in from a customer and manufacturer level. Without market demand, there will be no incentive for manufacturers to release new zero-emissions vehicles. To ensure these targets are met, the Government of Canada has provided customer-based rebates to motivate purchase of zero-emissions vehicles, in hopes that it will push sales.
To incentivize the adoption from gas to electric, the government of Canada has been offering rebates on zero-emissions vehicles. Currently, there are two different rebates. For zero emissions vehicles under 6 seats, the pre-tax price of the base model of that vehicle must be under $45,000.00 (unless it is a higher end version of that vehicle, in which the pre-tax price is $55,000.00) and an individual will quality for a $5000.00 rebate on the purchase, just for buying zero-emissions. For vehicles over 6 seats, the base model pre-tax price must be under $55,000.00 (with a high-end version of $60,000), the incentive remains the same, at $5,000.00. If these vehicles were plug-in hybrid instead of fully zero-emissions, the incentive is reduced to $2500.00.
Although these monetary incentives do not seem like much in the grand scheme, there is no other program out there where the government will pay you to buy a certain type of vehicle. For that incentive alone, there is value in purchasing a zero-emissions vehicle. In addition to federal government incentives, there are programs operating in a few provinces that top up this incentive. These provinces include British Columbia ($3000 rebate), New Brunswick ($5000 rebate), Nova Scotia ($3000 rebate), Quebec, ($8000 rebate), Yukon ($5000 rebate), and the Northwest Territories ($5000). Unfortunately, Ontario does not offer any type of rebate at this time but does offer the luxury of getting to use the carpool lane without the designated number of passengers. These additional monetary incentives and benefits, coupled with the federal government rebates, make buying a zero-emissions vehicle more enticing.
Zero-Emissions Automobile Manufacturers
Some automobile companies have chosen to move forward ahead of the curve, aiming to provide the market with exclusively electric vehicles. Some ambitious manufacturers are Jaguar by 2025, along with Bentley, Cadillac, Mini, and even Volvo, who all aim to only offer electric vehicles by 2030. Almost all other car manufacturing companies, including GM, Nissan and Volkswagen have set their targets to align with government regulations, for 2035. Most manufacturers are naturally increasing their electric vehicle selection as well, releasing new models and versions every day to accommodate the market shift.
Obviously there are a few companies out there that currently only make exclusive electric vehicles, the most popular being Tesla. Tesla has acted as a leader in the electric car manufacturing industry (even though the technology has been around for decades), pushing the limits through long-range battery life and high technology packages. Setting the bar for the electric vehicle industry, Tesla has been ahead of the zero-emissions mantra for quite some time.
As gas and diesel prices continue to sky rocket, electric & zero emissions vehicles are looking more and more enticing to the average consumer. These vehicles have become more common in the automobile industry, I would not be surprised if government targets are exceeded. As more manufacturers release new models, with new features and technology, many people will want to go electric. As they release new models, many manufacturers will offer zero-emissions cars at varied price points to accommodate all markets. As zero-emissions vehicles become more common on roadways, we will see more and more ‘charging’ or ‘hydrogen fueling’ stations available. As these become more accessible, there will be many individuals who will see more convenience in zero-emissions vehicles than their gas-engine counterparts.
Zero-emissions vehicles will no longer be a niche, but a normalcy for the everyday family, especially by 2035. Although that timeline may seem far away (or maybe not far enough away for some), it is necessary so that the market moves towards the goals at a steady pace. This will be a key government move to curb Canada’s environmental emissions. The transportation industry is one of the leading contributors to greenhouse gas emissions, and now, can be completely zero-emissions.