Automotive News Canada - March 2023 - 27

* MARCH 2023
27
National ZEV sales mandate
might worsen inventory bias
The federal law in no
way ensures that all
areas of the country
will have an even
supply of EVs to sell
By DAVID KENNEDY
T ORONTO BUREAU CHIEF
THE PROPOSED FEDERAL
zero-emissions-vehicle sales mandate
threatens to exacerbate the disproportionate
allocation of ZEVs in
British Columbia and Quebec, leaving
dealers in other
provinces with
limited electrified
inventory, industry
experts warn.
The draft legislation
requires that
ZEVs make up at
least 20 per cent of
new-vehicle sales in
Canada by 2026. The
percentage increases
every year
until 2035 when it
reaches 100.
Unless amended,
the proposed legislation
could further
distort the market
in favour of the
two provinces that
already have ZEV
sales requirements,
consumer interest and infrastructure
readiness, " the department
wrote in laying out the regulations
in the Canada Gazette, a federal
publication.
Automakers indicated that
they allocate inventory on a
countrywide basis and that
" regional requirements would
not generate any additional supply
for Canada, " the environment agency
said.
Breton:
" Basically,
the manufacturer
would
get
double the
credit if
they sell
in British
Columbia
and
Quebec. "
FILE PHOTO
said Daniel Breton, president of
Electric Mobility Canada and a
backer of a federal ZEV mandate.
" Basically, the manufacturer
would get double the credit if
they sell in British Columbia and
Quebec, " Breton told Automotive
News Canada.
Under the federal and provincial
schemes, automakers must hit the
mandated targets or face enforcement.
Matching the requirements
through ZEV sales is the most
straightforward approach, but automakers
can also trade for credits,
which are generated by surplus
ZEV sales, to offset internal-combustion-engine
vehicle sales that
exceed the threshold.
NO REGIONAL REQUIREMENTS
Without a backstop preventing
automakers from doubling up federal
and provincial credits, they
are likely to continue allocating
vehicles to British Columbia and
Quebec, leaving other provinces
under-supplied, Breton said. Both
B.C. and Quebec are targeting 26
per cent of new vehicle sales to be
ZEVs by 2026.
On Dec. 31, Ottawa released a full
accounting of its proposed legislation
to amend how the Canadian
Environmental Protection Act
governs light-duty vehicles.
Environment and Climate Change
Canada said it left regional requirements
out of the draft regulations,
as " there is no practical way to
establish regional sales mandates at
the federal level. "
" Moreover, ZEVs continue to
gain market share throughout the
country, and national requirements
would give automakers the flexibility
to respond to markets with high
If the draft regulations are
pushed through unchanged, at least
20 per cent of the new vehicles
that each automaker sells in
Canada must be nonemitting
by 2026 - but car companies
will be under no obligation to
reach that threshold in all provinces.
The same would apply as
higher percentages of national ZEV
sales are required into the 2030s.
That would mean that some
provinces could do the heavy lifting,
while others lag on adoption.
This disjointed rollout has been
the case so far.
THREE PROVINCES DOMINATE
Through the first three quarters
of 2022, British Columbia and
Quebec accounted for 36.7 per cent
of all new light-duty-vehicle registrations
in Canada but 61.9 per cent
of new ZEV registrations, according
to the latest data available from
Statistics Canada.
Add in Ontario, and the
three provinces made up 92.5
per cent of all new ZEV registrations,
compared with
75.9 per cent of all vehicle
registrations.
One of the main goals of
Ottawa's ZEV mandate is
to encourage " more ubiquitous
availability " of ZEVs
across the country, said
David Adams, president of
the Global Automakers of
Canada, which represents
overseas brands in the country.
" As
it sits right now, I'm
not sure [the mandate] will
change the current dynamic
where we have a lot of vehicles
going into Quebec and
B.C., " he said.
The federal ZEV mandate will be
administered nationally, which
means automakers are free to
allocate vehicles to provinces or
regions of their choosing to meet
sales targets. As a result, some
regions will likely go without.
Quebec and British Columbia,
he said. Compare this to Atlantic
Canada - where provinces have
rebates but no mandates, and
where there is strong demand for
ZEVs but limited availability, he
said.
Breton said that omitting regional
requirements from the federal
legislation could exacerbate
the challenges on the East
Coast.
Adams: " I'm
not sure [the
mandate]
will change
the current
dynamic
where we
have a lot
of vehicles
going into
Quebec and
B.C. "
FILE PHOTO
Adams, who has criticized
the effectiveness of a federal ZEV
mandate since it was first floated
last year, said he would prefer to
see measures to support ZEV adoption,
such as extra credits provided
for selling in underserved markets.
Looking to a federal ZEV mandate
as a cure-all that will ease supply
shortages and lower costs is
misguided, he said.
" All that will happen naturally
over the course of time. " The automakers
he represents are all " moving
in that direction, " Adams said,
but the pivot to ZEVs cannot happen
overnight.
MANDATE MATTERS
Breton of Electric Mobility
Canada disagrees, and believes a
mandate would ease vehicle supply
challenges.
The combination of ZEV sales
requirements and consumer purchase
incentives has created both
supply and demand for ZEVs in
" They have put together
rebates, they're supporting
EV adoption, they're trying
to install EV chargers, " he
said. " But if they can't get
any supply, it's not about
heavy lifting. It's more
about the fact that they
want more supply, and for
them it's going to become
even more of an issue. "
Prince Edward Island
and Nova Scotia are already
looking at enacting provincial
ZEV mandates mirroring
those in British
Columbia and Quebec, to
head off further availability
problems, Breton said.
More provinces with
their own ZEV mandates
would be even more disruptive for
automakers, Adams said, as they
would need to comply with different
sets of rules in each province,
plus the federal regime. If it came
down to choosing between patchwork
provincial regulations and
overarching federal rules, his members
would prefer a unified national
approach, he said.
But Adams is skeptical that the
federal government will find a
mechanism to add a regional element
to its mandate.
Industry input was due by March
16 for a 75-day consultation period
on the draft legislation.
Breton is more optimistic that
regionality will find its way into the
final regulations, adding that there
is " still room for discussion. "
" We have to find a way, " he said.
" Otherwise, I'm really concerned
about what's going to happen to
Atlantic Canada and the Prairie
Provinces. " - ANC
TRANS-CANADA NEWS
5,000 KILOMETRES OF STORIES
CONTINUED FROM PAGE 3
projects, leveraging $380 million in additional spending
from Canadian manufacturers.
NGen said its upcoming funding calls will " focus specifically "
on opportunities in the zero-emissions-vehicle
space, circular manufacturing supply chains and the
decarbonization of manufacturing processes. It said the
federal funding commitment will allow it to launch a new
call for proposals to industry shortly. - David Kennedy
Small-town dealer has big hopes for EVs
DAUPHIN, MAN. - THE FIRST ELECTRIC VEHICLE
fast charger at a dealership in this rural community 170
kilometres north of Brandon has been installed at Dean
Cooley General Motors.
Dealer Principal Dean Cooley said the charger will
support a " good variety " of EVs coming from GM in the
next few months. The fast charger is part of the Flo network
and will deliver an 80 per cent charge to most EVs
in 20 to 30 minutes.
Along with the new infrastructure, the dealership has
invested in a forklift for moving batteries, an oversized
hoist to accommodate their weight and special tooling. It
has also trained its technicians to tackle the new breed of
vehicles.
" All in all, we will invest approximately $100,000 in
preparing ourselves for the EV business, " Cooley told
Automotive News Canada.
" We are set to go. "
Cooley also owns Dauphin Ford next door. He said
Ford is in the last stages of finalizing its dealership EV
requirements, but his store has already delivered " a
handful of Ford Lightnings and Mustang Mach-Es. "
- Joe Knycha
U.S. vice-president tours 'the future'
MANITOBA-BASED NEW FLYER INDUSTRIES
hosted U.S. Vice-President Kamala Harris at its St. Cloud,
Minn., electric transit-bus plant Feb. 9, where she lauded
the company's record of
mass-mobility innovation.
Harris viewed NFI's
Xcelsior line of electric buses
and saw the assembly of the
U.S.-made battery packs that
power them.
" In 2009, then-Vice-President
Joe Biden stood in this
plant - when at the time you
were building cutting-edge
hybrid-electric buses - and
said, 'NFI is an example of the
future,' " Harris recalled.
" A lot has changed in the
last 14 years, but one thing
has not; you are still an example
of America's future, " she
said.
NFI CEO Paul Soubry said
U.S. Vice-President
Kamala Harris visited
New Flyer's electric
transit-bus plant
in Minnesota. The
company is based in
Manitoba.
PHOTO: NFI GROUP INC.
discussions with Harris included the Biden administration's
record investments in public transportation and
" opportunities for the administration to assist our manufacturing
industry as we recover from the effects of global
supply disruption and prolonged inflation. " - Joe Knycha
McLaren dealership coming to Quebec City
U.K.-BASED SUPERCAR AND HYPERCAR MAKER
McLaren Automotive will open its fourth Canadian retail
outlet this spring, the company announced.
The new Quebec City outlet will be operated by Holand
Automotive Group in Quebec.
" Considering the consumption of luxury products,
which is increasing, and the position of our group in
this segment, we are confident of the potential that
Quebec City offers for our success, " said Jean-Francois
Tremblay, vice-president, operations, for the group.
McLaren said the decision to add the Quebec City dealership
is driven by increased sales potential in the country.
" Canada ranks among the top 10 markets globally for
high-net worth individuals, " the company said in a news
release.
The other Canadian McLaren outlets are in Toronto,
Montreal and Vancouver.
The Holand Group also recently acquired the 4.3-kilometre
Circuit Mont-Tremblant racetrack, 150 kilometres
northwest of Montreal, which will provide " a new
opportunity for prospects and owners of McLarens in the
Canadian market to enjoy the full potential of the cars, "
the news release stated.
The company's cars are assembled at its facility in
Woking, Surrey, England. - Doug Firby
Automotive News Canada - March 2023

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