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Canada’s role in the electric vehicle transition

Canada is the 12th largest vehicle producer, but electric vehicle production, 0.4% of the country’s total, is 80% lower than the global average

This paper evaluates Canada’s position in the global electric vehicle industry by analyzing sales and production trends for conventional and electric vehicles and comparing these trends to similar auto markets around the world.

Canada is the 12th largest vehicle producer, but electric vehicle production, 0.4% of the country’s total, is 80% lower than the global average. Canada ranks 5th globally in commercial vehicle production at nearly 1.4 million vehicles produced in 2018, and it exports close to $3 billion in vehicles from the heavy-duty sector. Canada ranks sixth in the world in electric heavy-duty vehicle production, despite a relatively small share (0.1%). Canada’s position in the global automotive industry could be strengthened with stronger action to support the transition to electric vehicles.

The predominant action Canada can take to spur electric vehicle manufacturing is to grow its domestic electric vehicle sales market. Sustained incentive, infrastructure, and consumer awareness policies would improve Canada’s attractiveness for increased electric vehicle sales and investments. Supply-side policies such as research and development funding, loan guarantees, and tax breaks for manufacturing plants are warranted to position Canada’s auto industry for the future. Moreover, domestic manufacturing requirements for the procurement of public transit vehicles can serve to increase production of electric buses in Canada.

Canada can build on its early leadership in developing and producing hydrogen fuel cell technology—especially for heavy-duty vehicles. Some regions in Canada have a significant excess of renewably sourced electricity, primarily hydro-electric power, that can be used to produce low-cost, low-carbon hydrogen for powering fuel cell vehicles. In addition, hydrogen fuel cell vehicles are likely to play a critical role in Canada’s on-road freight sector, since fuel cells have a lower weight penalty and improved cold temperature performance compared to battery-electric trucks.

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SOURCE: ICCT

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