Fast and furious Turns out electric vehicle sales remained strong throughout 2023

A look back on sales of electric cars shows that uptake remained vigorous throughout 2023 both in Canada and around the world.

Global purchases of battery electric vehicles and plug-in hybrids rose 20 per cent compared to a year ago, based on market research and reported on by Reuters. In November alone these electric vehicles (EVs) set a record, posting sales of 1.4 million units, up from 1.1 million in November 2022.

Research out of the Rocky Mountain Institute (RMI), a U.S.-based clean energy think tank, reveals a pattern of steadily rising demand alongside falling prices for batteries used in electric vehicles. Batteries are one of the biggest contributing factors to the high sticker prices for EVs.

Since 2014, however, battery demand has been growing at an annual average of 41 per cent, doubling every two years. Growth this steep has a meaningful impact on manufacturers and consumers alike. RMI reports that battery cell prices fell to below US$100/kWh for the first time this summer. This means EVs will become less expensive to make and cheaper to buy. When cell costs reach about US$80/kWh, EVs will be at retail price parity with internal combustion engine vehicles. Both Bloomberg and RMI anticipate cost parity between EVs and gas cars by or before 2030.

EV sales powered up

In Canada, consumers have driven a significant rise in EV sales despite the absence of zero-emission cars on most dealer lots.  According to data released by S&P Global Mobility, registrations for EVs reached 13.3 per cent in Canada in Q3 of 2023 – one in eight new vehicles registered were electric, an increase of 2.7 per cent from Q2 2023, with a market share of 10.5 per cent.

The news gets even better. A new report from RBC Capital Markets predicts the electric vehicle market is on the verge of substantial growth, as prices stabilize and charging infrastructure expands. The Canadian outlook reflects the bullish global market. BloombergNEF’s annual Electric Vehicle Outlook 2023 report predicts continued growth in EV uptake, rising from 10.5 million units sold in 2022 to almost 27 million in 2026.The EV share of global new passenger vehicle sales surge from 14 per cent in 2022 to 30 per cent in 2026.

As 2023 draws to a close, it looks to be yet another record year for global purchases of battery-operated passenger cars, at over 14 million sold. Should passenger EV sales hit that mark, purchases would be approximately 34 per cent higher this year than last and 115 per cent higher than in 2021.

Market adjustments

According to Auto Trader, 56 per cent of Canadians polled intend to make an EV their next car purchase, down from 68 per cent in 2022 — no doubt more motivated at the time due to high gas prices.

Bloomberg, in turn, revised its electric vehicle sales outlook this month, predicting that automakers will sell 16.7 million battery-electric and plug-in hybrid vehicles in 2024 worldwide. This represents a sales decline of about 4 per cent from Bloomberg’s original forecast, or 775,000 cars.

Canada stays in the fast lane

All told, EV uptake is far from sluggish in Canada, but it is unevenly distributed. British Columbia and Quebec boast the highest levels of electric car ownership in the country by a considerable margin. (Both provinces implemented sales mandates for zero-emission passenger vehicles and also top up the federal rebate with a provincial one that consumers can apply to their electric car purchase. In addition, there has been comparatively robust support in both provinces for building out charging infrastructure.)

This is about to change. Ottawa released new regulations this week that require auto makers to produce more battery-operated cars as a proportion of their overall car sales. By 2035, all new cars sold by manufacturers and importers must be zero-emission vehicles. As the new regulations kick in, Canadians will start to experience shorter wait times for new EVs and will enjoy a far greater number of models to choose from at lower purchase prices. Moreover, electric vehicles are much cheaper to maintain than gas cars and charging a vehicle is a fraction of the cost of filling the tank.

The new policy brings Canada much closer to realizing our collective climate goal: if the sales targets are met on time and in full, greenhouse gas emissions will fall by 430 million tonnes by 2050, equivalent to removing 95,688 gasoline-powered passenger vehicles driven for one year.