Canada Electric Car Market Poised for Exponential Growth, Expected to Reach 139,846 Thousand Units by 2029

The Canada Electric Car Market, which recorded a volume of 38,576.27 thousand units in 2022, is projected to surge to 139,846.47 thousand units by 2029, exhibiting a remarkable CAGR of 20.2% during the forecast period of 2023–2029. This impressive growth reflects the rising adoption of electric vehicles (EVs) fueled by technological advancements, government incentives, and increasing consumer awareness of environmental sustainability.

Market Overview

The adoption of electric vehicles in Canada has gained significant momentum in recent years. Consumers are increasingly inclined towards electric cars due to several compelling factors, including environmental concerns, lower maintenance costs, competitive fuel economy, and improvements in charging infrastructure. Technological innovation and heavy investments in research and development have also enhanced the performance, range, and efficiency of electric cars, making them more appealing to Canadian buyers.

The country aims to achieve a reduction of 12 megatonnes of CO2 emissions by 2030, positioning electric vehicles as a key contributor to this environmental objective. While the transition to electric mobility in Canada has been gradual compared to some other developed nations, EV sales in the first half of 2022 grew by 30%, with one in fourteen new vehicles being fully electric or plug-in hybrid.

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Government Initiatives Driving Market Growth

The Canadian government has implemented a range of incentives under the Incentives for Zero-Emission Vehicles (iZEV) program to encourage EV adoption:

• Battery Electric Vehicles (BEVs), long-range Plug-in Hybrid Electric Vehicles (PHEVs), and hydrogen fuel cell vehicles with an electric range of 50 km or more receive a grant of USD 5,000.
• PHEVs with less than 50 km electric range are eligible for USD 2,500.

The iZEV program applies the grant directly at the point of sale and is expected to continue until 31 March 2025 or until the allocated funds are exhausted. Furthermore, federal regulations propose that by 2026, 20% of all passenger vehicles sold in Canada must be electric, reaching 60% by 2030, and ultimately targeting 100% of new passenger vehicle sales to be electric by 2035.

Charging Infrastructure Development

One of the significant barriers to EV adoption has been the availability of charging stations. Canada has made considerable strides in this area, with 8,726 public charging stations and 20,423 charging ports installed by February 2023. Ontario and Quebec lead in infrastructure deployment with 2,538 and 3,434 charging stations, respectively, while less populated regions like Yukon and Northwest Territories remain underdeveloped. The Canadian government plans to invest USD 400 million in new charging stations and USD 500 million in financing through the Canada Infrastructure Bank, aiming to add 50,000 new EV chargers nationwide.

Regional Insights

• Quebec: Dominated the Canadian electric car market in 2022, attributed to generous state incentives of up to USD 7,000 for the purchase or lease of new or used EVs, and supportive policies for car-sharing programs.
• Ontario: The second-largest market, driven by government rebates, availability of over 1,000 grants for used EVs, and substantial investment in charging infrastructure. Cities like Toronto, Hamilton, and Ottawa exhibit high EV density due to public awareness and convenient charging facilities.

Market Segmentation

By Technology:

• BEV (Battery Electric Vehicles): Largest market share in 2022, with 85,000 units sold, marking a 44.1% growth from the previous year.
• PHEV (Plug-in Hybrid Electric Vehicles) and HEV (Hybrid Electric Vehicles): Growing steadily, catering to users with mixed energy needs.

By Battery Type:

• Lithium-ion Batteries: Dominant, due to high energy density, lightweight design, and efficiency, with subtypes NMC (Nickel Manganese Cobalt) and LFP (Lithium Iron Phosphate).
• Solid-State Batteries: Emerging technology expected to gain traction in the forecast period.

By Charging Point:

• Normal Charging: Major share, suitable for daily commuting and routine parking.
• Supercharging: Growing demand for faster charging in urban areas and along highways.

By Car Type:

• Passenger Cars: Leading segment, expected to grow due to federal zero-emission mandates.
• Commercial Cars and Shared Mobility Vehicles: Increasing adoption driven by sustainability initiatives and urban mobility programs.

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Competitive Landscape

The Canadian electric car market is highly competitive, with both domestic and international players:

• Domestic Manufacturers: Electra Meccanica, Daymak, Briggs Automotive Company (BAC), Campagna Motors.
• Global Players: Tesla, Chevrolet, Hyundai, BMW, Kia, Audi, Jaguar, Volvo, Toyota, Ford.

Innovations in design, 3D printing in manufacturing (as adopted by BAC), solar-powered charging systems, and crowdfunding models for new EV concepts (as done by Daymak) are enhancing the competitiveness of Canadian EV manufacturers.

Conclusion

The Canada electric car market is set to witness exponential growth over the coming years, propelled by government incentives, advancements in battery and charging technology, and a shift in consumer preference towards sustainable mobility. With the growing commitment to achieving zero-emission targets and substantial investments in infrastructure, Canada is positioned to emerge as a significant market for electric vehicles in North America, offering lucrative opportunities for both domestic and international market players.