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Can Toronto accelerate its transition to electric vehicles?

By February 19, 2020 No Comments

At a recent infrastructure and environment meeting in the city of Toronto, a report issued laid out a plan to dramatically jump-start Torontonians’ use of electric vehicles.

The proposed electric vehicle (EV) strategy called for 10 broad actions to speed up the switch from gasoline-based vehicles to zero-emission vehicles. By 2050, it plans to have all private vehicles on the road to be electric ones.  

Among these actions include:

·       A major increase in the number of public charging stations including on-street residential plug-ins for those who don’t have driveways

·       Exploring partnerships to expand charging infrastructure

·       Fast-tracking the city’s vehicle fleet transition to green vehicles

·       Incentives  or requirements to get electric vehicles for hire including for Uber, Lyft and taxis

Is it ambitious? Yes. Is it costly? Certainly. Is it achievable? Maybe. There are some major hurdles that remain huge barriers to make this transition.

The cost is the most unsurprising issue with this transition plan to EV. 

Electric vehicles aren’t cheap. The 2019 Tesla Model S costs on average $108,600. Willing to drive something other than Tesla? The Nissan LEAF and the Hyundai Ioniq Electric range from $30,000-$42,000. These are admittedly, better prices than a newer Tesla. But a 2020 Toyota Corolla averages at $19,000-$25,000. Most drivers will opt for the cheaper vehicle.

That’s just the upfront cost. It’s cheaper to buy gasoline or diesel than plugging in your EV.

There is a significant issue in creating public charging infrastructure – the high peak in electricity required to fast charge an EV will result in higher electricity demand. The added problem is also that the current Ford government has no plan to boost EV ownership by offering rebates.

The Canadian Press reported last December that EV sales in Ontario dropped significantly after the province cancelled the $14,000 rebate on most Tesla models in 2018. The sales rebounded slightly in 2019 after Ottawa introduced a $5,000 rebate according to Electric Mobility Canada.

Right now, there are only 6,300 electric vehicles in Toronto. That’s less than one percent of all vehicles registered in the city.

Is the $5,000 rebate enough to compel Toronto’s drivers to make the switch? Evidently not.

But what could compel drivers to switch to EVs?

To answer this question, I examined the policies of Norway, a country which has made a major transition to EV. As of May 2018, there are roughly 230,000 registered EVs in Norway.

Government-backing is plentiful for electric cars and there’s a wide selection of incentives and perks to back the sales. Buyers do not pay import tax and 25% Value added tax (VAT) on EVs which saves thousands on the upfront costs.

Electricity is also cheaper than petrol and diesel making running costs lower as well.

According to the Norwegian policies, the perks keep going; no annual road tax, free municipal parking (in some areas), no ferry fees, reduced road tolls and a bypass option by driving in some bus lanes. The government intends to keep the incentives for zero-emission cars until the end of 2021.

How can the Norwegian government afford to offer such incentives?

The government of Norway has invested in sovereign wealth funds known as the “Oil Fund.” Established in 1990, the government began investing the surplus revenues of the petroleum sector.

As of September 2017, Norway’s sovereign-wealth fund has surpassed $1 trillion in assets. Unsurprisingly, this revenue comes from pumping the North Sea for oil and gas. In May 2018, it was worth about $195,000 per citizen.

To be clear: Toronto is nowhere near Norway. It doesn’t have a Wealth Sovereignty Fund which can help offset the losses the government has by offering all these incentives for citizens to make the switch.

In order to make such drastic changes, cities, provinces and even countries need to heavily incentivize EVs. It’s not enough to promise to offer a rebate for a fraction of the cost. Most Torontonians can’t afford a Tesla on the median income. The promise of lower maintenance costs and the lowering of emissions might attract some drivers but the average citizen would rather purchase a Toyota and save themselves the money.

This leads to the problem with infrastructure.

While it’s acknowledged in the report that most users charge at home, the city has a large portion of residents without access to a garage or driveway. Couple with the lack of public charging infrastructure and this can severely limit the ability to travel longer distances. There is also the added cost and concern that older houses would need to build new infrastructure to support charging your vehicle.

How much money has Toronto put into this plan?

So far, the city has submitted roughly $150,000 to council as part of the city environment and energy division’s 2020 operating budget to fund a public charging location study as well as outreach and engagement projects.  That’s not nearly enough.

The final, bigger problem is long-distance travel.

Many drivers don’t purchase cars with the plan of leaving them in their garage. They use their car to travel, be it across the city or across multiple cities. Can we guarantee that once I take my Tesla outside of Toronto on a drive to Ottawa that there will be enough charging points for me to successfully complete the trip?

Even in Norway, where EVs are popular, they haven’t completely given up their gasoline or diesel based cars. For long-distance trips outside of the cities, Norwegians typically use their large, gas guzzling SUVs. The transition in effect, isn’t complete.

Let’s face it: Torontonians and to large extent Canadians are attached to their gasoline vehicle. This is problematic given the numerous studies which suggest the increasingly large amounts of emissions that these guzzlers emit.

The transition to EV should and must happen for the sake of our climate. But it should happen across Canada, with careful consideration into the infrastructure needed to be built and the amount of money governments can afford. 

More importantly, drivers need to know that buying an EV isn’t just a climate friendly investment, it’s an economically smart one too.