How Canada can – and probably will – screw up its new ‘zero emission vehicle’ strategy

zero vehicle emission
The Bison, a e-truck prototype developed by Havelaar Canada. Photo: Havelaar Canada.

New zero emission vehicle policy could lock Canada into EV “replacement model” just as TaaS takes hold in market

The Canadian government announced late last month that a national zero emission vehicle – read, electric vehicle – will be developed by 2018. The Liberals have a chance to get it right and do plenty of good for consumers and the economy, but they have an equal chance of completely screwing it up and wasting a lot of taxpayer money to little effect.

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Canada needs a clear-eyed view of electric vehicle technology, EV ownership and business models, and the potential EVs hold for a huge country with a northern climate.

Canada is not California.

Speaking of California, Gov. Jerry Brown brought in his own EV strategy a few years ago and the results are underwhelming.

The state implemented a zero-emission vehicle credit that doesn’t encourage automakers to put more EVs on the road, but puts money in a manufacturer’s pocket anyway.

Brown set a target of 1.5 million EVs sold by 2025 and 4.2 million by 2030, but will fail to meet that target in spectacular fashion, according to a report by the Natural Resource Defense Council last year, which predicted less than a million sold. With only 223,700 registered as of last summer, the odds of the California meeting even diminished expectations is slim.

Nevertheless, California is doubling down on EVs by spending $1 billion on public charging infrastructure. Who will pay the bill? Consumers, via rate hikes.

Why does California matter?

Because eco-hype cyclers want to replicate it in Canada.

When Premier Christy Clark revised British Columbia’s climate plan last year, she ignored all of the recommendations from the climate leadership team she had asked to provide advice. One of the key recommendations from that group was to design a zero emissions vehicle policy just like California’s.

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The May 9 election brought BC a hung legislature, which may result in an NDP minority government backed by the Green Party. Here is Ian Neville, the City of Vancouver’s EV policy analyst (are we surprised Vancouver has one of these?), noting that the NDP/Green agreement called for accepting all of the BC climate team’s recommendations and pumping the tires of “strong government policy” to hasten the “electric mobility future.”

Canadians can reasonably expect a Premier John Horgan to push a similar scheme at the national level now that the federal government is developing a zero emissions vehicle policy.

zero emission vehicleAccording to Ottawa, transportation accounts for about 24 per cent of Canada’s emissions, mostly from cars and trucks.

“New measures to improve efficiency across the transportation sector, as well as to encourage zero-emission vehicles, will complement carbon pricing and take advantage of a low-carbon electricity grid,” Environment Minister Catherine McKenna said in a press release when the new direction was announced.

The mostly likely “new measures” will be subsidies designed to lower the cost of EVs, which are generally twice the cost of an equivalent internal combustion engine (ICE) car and more money to subsidize building public charging infrastructure.

In other words, the California approach.

Both measures will fail, just as they have failed in other countries (EV sales and ownership rarely breaks the one per cent of sales and one per cent of national auto fleet threshold, except for Norway and Sweden, small countries with Nordic governments happy to subsidize at high levels).

Why? Because they will support the “replacement model” of private vehicle ownership (consumers simply replace an ICE car with an EV), which will mostly take 50 years or more to displace ICE vehicles as the dominant form of road transportation.

And all those taxpayer dollars will be spent just as new technology (autonomous driving) and a new business model (Transportation as a Service, or TaaS. Read my columns here and here and here and here) promise to revolutionize the way we move people around Canada – especially in mega-cities like Vancouver, where traffic congestion is already a major problem and will only get worse.

zero emission vehicle
Catherine McKenna, Canadian environment minister.

If the Canadian government locks itself into policies based on the replacement model and a few years later TaaS begins to transform transportation, then the Justin Trudeau Liberals will have set back the diffusion of EVs rather than aiding it.

And let’s not forget one of the major impediments to the spread of TaaS will be the archaic taxi monopolies that cities like Vancouver and Calgary have propped up for decades and – in the face of competition from ride-sharing company Uber – have been very reluctant to tackle for political reasons.

The next step for the federal process is a national advisory group that will consult with Canadians nd provide recommendations in five areas: vehicle supply, cost and benefits of ownership, infrastructure readiness, public awareness, and clean growth and clean jobs.

Astute readers will note that EV business/ownership models are not on that list.

They need to be. The replacement model will take 20 to 30 years (until the next generation of EV battery is ready) to make any real progress in the market.

Stanford economist Tony Seba predicts that TaaS using self-driving EVs will begin revolutionizing transportation as early as 2020. My reporting suggests the date will be closer to 2030 because Seba is overly optimistic about when autonomous technology will be ready.

Nevertheless, the point here is that the electrification of transportation is potentially on the cusp of radical change and Canada must not be stampeded by the likes of Neville and Vancouver into betting on the wrong model.

Go slow, get the policy right, and reap the benefits. Canada could do worse than follow that strategy.

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