As Canada goes all-in on electric vehicles in its fight against climate change, it looks like 2024 could be a big year for the industry.

Government data show 132,783 new vehicles out of 1,286,951 registered in Canada in the first nine months of 2023 were either battery electric or plug-in hybrids.

And the industry appears primed for growth. The federal government announced this week that it would phase out sales of gas vehicles by 2035. Ottawa has also mandated that EVs must make up 20 per cent of auto sales by 2026.

"The purpose of the availability standard … is to make those electric vehicles more available to have more models available across the country so that Canadians can buy them, because clearly there is a demand,” Environment Minister Steven Guilbeault told BNN Bloomberg in a television interview on Tuesday.

Neil Cawse, CEO and founder of the telematics and connected vehicle solutions company Geotab, told BNNBloomberg.ca that Canada’s new EV standards demonstrate that Canadians “need a regulatory push” in the transition to more widespread EV use. 

“If we don't get the critical mass of investment in EV supply chains and infrastructure, then we won't 'get over the hill' to get enough EVs manufactured, which in turn brings us efficiencies of scale,” he wrote in an email after the announcement.

“EVs have a better total cost of ownership – fuel as well as maintenance and reliability – and are necessary for reducing emissions.”

BNNBloomberg.ca spoke with Cawse in early December to break down what he thinks are some of the biggest trends coming to the EV industry in the next year.

BREAKING MISCONCEPTIONS

Cawse believes 2024 could be the year misconceptions surrounding the EV industry and EV ownership are broken down.

“We need to see really a bit of a realignment, and we're seeing it around people just getting more comfortable with it,” he said.

“I think it's just going to continue to grow.”

He predicted a “good year” in store for the sector in 2024, and “an even better year for EVs” to follow in 2025 as people grow more used to the idea of electric cars.

Some concerns have been raised about the availability of charging infrastructure for electric vehicles, as well as the high upfront cost to buy the vehicles.

But Cawse contended that issues surrounding electric vehicle prices, maintenance and charging infrastructure have largely been reduced. In his view, the next challenge will be communicating that to the public.

“People look at EVs as more expensive than gas vehicles, but they're not looking at total cost of ownership,” he said.

“Obviously, we know that electricity is significantly cheaper than gas, but there's other hidden benefits to EVs that are being, frankly, not looked at properly … Maintaining an EV is very inexpensive.”

Cawse said in his 11 years of owning an EV, the only maintenance he’s had to complete is a single brake pad change.

Garrett Nelson, vice president and senior equity analyst at CFRA Research, said the price premium on the average EV shrunk to just eight per cent in November, compared to the average gas-powered vehicle.

“If you look back a year ago, that premium was north of 30 per cent, so because of the price cuts of companies like Tesla and other major EV manufacturers, and also the inventory glut that’s developed in EVs, the price premium has really collapsed this year,” he told BNN Bloomberg on Tuesday.

Nelson believes the EV premium will continue to fall in the future, and could soon reach price parity with gas-powered vehicles in 2024.

Among the other roadblocks for many people considering an EV is the charging infrastructure, but Cawse said that issue has largely been resolved as well.

“It’s not really an issue. You can get anywhere in Canada with all the charges and the infrastructure that's around,” the Greater Toronto Area resident said.

A March 2023 report from Electric Autonomy Canada found Canadian EV drivers have access to 20,478 public charging ports, up 30 per cent from the start of 2022.

Additionally, the federal government has announced plans to spend $1.2 billion on building 84,500 new chargers across the country by 2029.

NEW TESLA MODELS?

While the first deliveries of Tesla’s long-awaited Cybertruck happened in late 2023, many people on the waitlist aren’t expected to receive their new vehicles until at least 2024.

But that’s not the only big development potentially in the works for Tesla. Nelson expects the EV leader will unveil a cheaper model to attract more buyers.

“2024 is the year that we think they’re going to unveil that with what they’re calling their next-gen electric vehicle model,” he said.

“It’ll be a coupe or hatchback, a small vehicle similar to the Chevy Bolt in terms of size, but we think it will sell very well.”

Tesla CEO Elon Musk has long hinted at developing a new Tesla with a US$25,000 vehicle, with reports swirling that the company is planning to build it at its facility in Berlin.

Still, Nelson doesn’t believe the vehicle will end up being that cheap.

“That was really a pre-inflationary price that the company was providing,” he said. “We think it’s most likely to be in the $30,000 to $35,000 range for a base price.”

COMMERCIAL INDUSTRY EXPANDS

Some Canadian companies began electrifying their fleets of commercial trucks in 2023, and 2024 could expand further into the commercial EV market.

In November, Tim Hortons unveiled its first two commercial EVs – Volvo VNR Electric Class 8 trucks – at distribution centres in Guelph and Langley, B.C. The vehicle in Guelph is already in operation, while the Langley one is expected to hit the roads in January.

The Canadian fast food chain said the vehicles will help the company cut down on the more than 25,000 litres of diesel fuel per vehicle it consumes annually.

A spokesperson for Tim Hortons declined to provide details on the company’s plans for more EV transport vehicles.

Meanwhile, Walmart Canada recently unveiled its first three electric semi-trucks – Freightliner eCascadias – at a food distribution facility in Surrey, B.C.

“The introduction of three electric semi-trucks at our Surrey distribution centre is just the first step towards our ambition of a 100 per cent alternatively powered fleet and we look forward to continuing our journey,” said Aaron Ritter, director of transportation at Walmart Canada, wrote in a news release.

Cawse believes more companies will expand their EV fleets in the next year.

“There’s absolutely no doubt that the volume of EVs being purchased, both commercially and from a consumer perspective, are growing all the time,” he said.

AI PLAYS A BIGGER ROLE

Artificial intelligence is also expected to make its way into the EV market.

Cawse said improved data collection will help electric cars improve performance and grow their artificial intelligence capabilities.

With further adoption of EVs, Cawse said data surrounding range in different weather conditions, battery maintenance and depreciation will only improve.

“AI is going to give us the insights that all of us need to be able to run those electric vehicles better and even more efficiently, more efficiently than they are already,” he added.

The AI tidal wave is already felt in the EV production sector. A recent report from the Smart Prosperity Institute found EV workers will need to develop new skills to keep up with the technological advancements.

The report doesn’t anticipate major job loss due to automation in the sector, however. Rather, it predicts that the advancements will change the jobs and the skills required to complete them.