Commentary

Peter Boag
President & CEO
Canadian Fuels Association
March 7, 2017

Car buying preferences of Canadians – a missed opportunity for climate policy-makers 

Canadians bought nearly two million new vehicles in 2016, and almost two-thirds of these vehicles were vans, SUVs or pick-ups. Canadians’ preference for this light-truck vehicle category has been steadily growing. The last time passenger cars outsold light trucks was in September 2009; the large SUV category had the biggest year over year sales growth – 53.5 percent. By contrast, compact and subcompact sales declined by 7 percent and 11.7 percent respectively1. Meanwhile, 10,839 electric vehicles were purchased in Canada in 2016 for a total new passenger car share of just 0.56 percent2.

These sales numbers present a real dilemma for federal and provincial policy-makers. Almost universally, they see significant electrification of the light-duty vehicle fleet as a major component of a suite of climate strategies to reduce transportation GHG emissions. Their 2030 reduction targets – indeed even those for 2020 – are based on rapid and significant market penetration of electric vehicles. Yet clearly, and notwithstanding generous purchase subsidies, the numbers above show that Canadians have not bought – literally – into this vision. Our vehicle preferences are firmly bound to the reliability and performance delivered by conventional internal combustion engine (ICE) powered vehicles.
 
But these sales numbers also present an opportunity, one that to date, policy-makers are ignoring.   

The modern, advanced technology ICE powered vehicles on the market today use far less fuel and emit far fewer GHGs than their predecessors. Across almost all vehicle segments, fuel efficiency has improved by more than 20 percent over the last decade. For SUVs, the improvement is between 25 and 30 percent. And further, continuous improvement in fuel efficiency/emissions reductions is expected for the foreseeable future. Researchers and engineers see technology pathways to achieve a further 65 percent improvement in ICE powered vehicle fuel efficiency by 2050 – that’s significant.
 
The other component of this opportunity is the current average vehicle age of the nearly 10 years.   Canadians are keeping their vehicles longer than ever before. Of the nearly 22 million registered vehicles in Canada today, nearly 1.5 million are pre-1995 model year vehicles3

Getting older gas guzzling vehicles off the road faster and replacing them with new fuel efficient ICE powered vehicles (yes, even new fuel sipping SUVs) presents a huge opportunity to reduce emissions by levering and aligning with consumer preferences. Accelerating fleet turnover and reducing the average age of the fleet by even one year should be a priority policy focus for governments.
  
The data shows that Canadians want to buy new ICE powered vehicles – why not provide incentives for more owners of older vehicles to update their ride to a new fuel efficient, lower emissions ICE powered vehicle?  From an emissions reduction perspective, it will be far more effective and cost efficient than the current approach of offering generous subsidies to buy electrical vehicles Canadians clearly don’t want.

 

1,3DesRosiers Automotive Consultants Inc.
2Green Car Reports, 2017