Interest in Electric Vehicles Declined in Canada in 2023, New Report Shows

Employees work on assembly line during a construction completion event of SAIC Volkswagen MEB electric vehicle plant in Shanghai, China, on Nov. 8, 2019. (Aly Song/Reuters)

Interest in electric vehicles (EVs) in Canada is declining at a time when the country has made billions of dollars of investments in factories to create the products, a new report has found.

“So higher gas prices, people are more interested in EVs, lower gas prices, that interest starts to soften a bit,” AutoTrader editor-in-chief Jodi Lai told Global News in an interview.

On Dec. 11, AutoTrader.ca published its top search data for 2023, which showed a rise in the popularity of trucks and declining interest in EVs from one year prior. Back in 2022, data showed that 68 percent of those surveyed who did not own an EV indicated an intent to buy one, but that fell to 56 percent in 2023.

AutoTrader said that while interest in alternate fuel types is 15 percent higher than last year, EV searches only account for less than three percent of overall searches. Of the Canadians who said they had no plans to buy an EV, 40 percent said it was because of the prices of vehicles, and 23 percent said it was because of inflation.

“Affordability is always an important consideration for vehicle shoppers, especially during these times,” said Ms. Lai.

“But when it comes to a milestone purchase as important as a vehicle, Canadians aren’t necessarily sacrificing spend,“ she said, adding that Canadian shoppers were seeking ”aspirational” vehicles and not merely economical options.

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Meanwhile, inventories of EVs made a “strong recovery” with the average weekly inventory increasing 146 percent compared to November 2021. AutoTrader attributed this to more options entering the market, and said EV truck choices are expected to increase in 2024.

The Canadian government announced in April it would give $13.2 billion in subsidies to Volkswagen’s battery cell plant. Then in July, the federal government and Ontario government said they would give a combined $15 billion in subsidies to Stellantis-LG Energy Solution, the parent company of Jeep and Chrysler, to build an EV battery plant.

In Quebec, the federal government and the province may also provide Northvolt with up to $4.6 billion to build an EV battery plant. Finance Minister Chrystia Freeland has said the new factories will create “thousands of jobs” in the auto sector and in related industries across Canada, which would “further solidify Canada’s place as a leader in the global electric vehicle supply chain.”

While Ottawa has estimated it will take five years for it to break even on subsidies it gave to the auto giants, Parliamentary Budget Officer Yves Giroux said that assessment was “wildly optimistic,” and his recent report found it would take more than 20 years.