Canadian Federal EV Policy – A Proposal

ZEV, EV and PHEV
ZEV= Zero Emission Vehicle
EV = Electric Vehicle
PHEV= Plug-in Hybrid Vehicle
ZEV includes all vehicles that have zero emissions at the tailpipe this includes Hydrogen fuel cell vehicles and EVs
EV is a battery powered electric vehicle with no other means of propulsion or charging on-board. also called BEV – Battery EV.
PHEV covers all vehicles with a battery that can be charged from the grid and an engine. Chevy Volt, BWM i3 REX and Chrysler Pacifica Hybrid are examples.
This proposal focuses on EVs and discounts PHEVs, this is because PHEVs depend on responsible use to deliver GHG reductions and this cannot be guaranteed.

The Government of Canada is working on a new Canadian Zero-Emission Vehicle Strategy to be published this year.  We have been wondering if this might answer some of the issues that surround the slow uptake of EVs and PHEVs in Canada.  In this search we found the “Canada’s ZEV Policy Handbook”  This was a really interesting read and but, and this is a a big but, it promotes perhaps the slowest possible transition away from fossil fueled cars to ZEVs.  Based on the idea that we should have an ZEV market share of 30% by 2030 and 40% by 2040, by which time India,  China, much of Europe and several other jurisdictions will be at 100% market share, by virtue of banning fossil fueled vehicles.  Cities across the world are considering banning all fossil fueled vehicles as soon as 2030.

We hope this lack of ambition will not be reflected in the new Strategy. Slow progress will ensure that Canada becomes a dumping ground for fossil fuel vehicles as the rest of the world moves into an electrified future.  This will lead to damage to the environment, our pocketbooks and to the auto industry.

Canada is in 20th place for ZEV sales, with less the 1% market share.  If we take a look a the electricity grid in the the same group of 20 countries, Canada has the 6th cleanest, with less than 20% of our electricity coming from GHG producing sources.

Data from EV-Volumes.com (1H 2017)

To put it another way, an EV in Canada is a far more effective way of reducing GHG emissions than an EV in most other countries. It is to our shame that we are not pulling on this very large climate change lever as hard as we possibly can.

It is worth taking a look at the countries that are doing well.  Norway, Iceland and Sweden share much of our climate and Norway and Sweden also have a similar  population density to Southern Canada.

So climate and population density are not valid excuses, so why are we where we are?

We think a small part of the reason is that Canada is a very conservative country, change happens slowly and we tend to look south for our cues rather than looking to the leaders in an area for ideas. That said, we think the larger part of this slow progress is due to the simple fact that the fossil fuel and automobile sectors will lose out as we transition from fossil to electric vehicles.

In the end state we will have vehicles that cost a lot less than the current fossil-powered ones.  As battery costs fall, the simplicity of EVs will take over and manufacturing costs will be less than those of fossil vehicles in the next couple of years.  Maintenance costs for EVs are much lower than fossil cars due to very few moving parts.

Car manufacturers are faced with consumers paying less per vehicle, Dealers will be doing less warranty work, oil companies will be selling far less gas and diesel.

Whilst powerful lobbies lose, society wins in this equation: less GHG emissions, less pollution, less particulates and less noise.  Individuals win: lower costs of purchasing, far lower operating costs.  The power companies win: load on the grid is spread and evened out making management easier, sales are higher, opportunities arise to gain a big advantage from vehicle to grid, to allow EVs to supply power during sudden peaks in demand.

Politics is about the art of the possible and we are sure that car manufacturers and oil companies are lobbying hard to ensure that Canada is the last country to move away from the status quo.

So what might be possible, even in a climate where the government is being told it is too hard a change to make?

Graphic from Pod Point via Fully Charged

This is what is possible for the UK market. Click on the graphic to see a great discussion. We can shift this 2-3 years to the right for a view of what we can do in Canada.

Targets

Given that Norway will be above 50% market share for EVs and PHEVs in 2018 we think it is important that Canada set a strong target. 30% by 2030 is not going to address our Paris commitments and will result in consumer demand being ahead of supply and infrastructure.

Proposal: Target 50% ZEV market share by 2028

PHEV market share would be above and beyond the 50% level.

A 50% market share by 2028 will allow Canada to achieve close to 100% electrification by 2050 whilst providing time for infrastructure build out and industry to adapt.

Supply

Currently it is not possible to go to a car dealer, test drive an EV and then pick up a new EV a few days later.  Waiting lists for EVs are long, 6-12 months depending on the manufacturer.  Current Provincial measures have been enough to generate far more sales than the car companies are willing to deal with.  Supply management is key to ensuring the availability of EVs from all companies across all vehicle types.

Today there are EVs and PHEVs in most categories, but few choices within a category, providing almost no choice for consumers.

Quebec has introduced a ZEV mandate to try to ensure that supply will be available for the future.  Quebec has joined Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Vermont in adopting California’s Air Resource Board (CARB) ZEV Mandate.  The CARB mandate is a points system, you get a maximum of 1.3 points for a PHEV and a maximum of 4 points for a pure EV depending on range.  For example a Chevy Volt PHEV gets 0.83 points while our e-Golf would get 1.75 points.  The CARB requirements are not very ambitious, aiming for about 8% market share in 2020.  To meet the 50% goal by 2028 it might be necessary to go beyond CARB’s requirement in 2025 and beyond by reducing the points for PHEVs and increasing the points requirement to get closer to the change required to meet 50% market share.

Proposal:  Adopt CARB ZEV Mandate with enhanced measures from 2025

Additional measures may be required, but these should be considered in concert with provincial programs.

 

Demand

Quebec, Ontario and BC have direct subsidies that have been effective in creating demand but, at least in Ontario created a lot of work and delays in processing individual claims.  Any measures aimed at large scale adoption of EVs have to be simpler to implement.

Ontario has proposed removing the provincial portion of HST on all EVs. This mirrors the key measure used so successfully in Norway.  With HST at 13% in Ontario compared with 25% in Norway, this lever is not very long, especially if it is limited to the provincial portion.  Removing the federal GST portion of 5%, nationwide, would send a strong signal to consumers.  This would remove about $2000 from the cost of the average car.

If we are aiming for 50% market share this would create a serious hole in the budget, so we propose increasing the GST portion as the market share rises. GST should increase by 1% each time EVs achieve another 10% market share  By the time the 50% target is reached, GST would be restored to the normal level and would hold at that level.  PHEVs would not be eligible for the GST reduction.

An important principle for climate change is polluter pays.  This is a hard sell for politicians but there is a case to be made for increasing taxes on fossil powered vehicles.  We propose that GST on new and used fossil powered vehicles be increased by 0.25% per year until the rate reaches 8%.  Each increase will add about $90 t0 the cost of an average car.  Combined with the GST relief on pure EVs, this would generate about a $1B per year over time.  This revenue should be used to pay for transitional costs such as charging infrastructure, electric buses and garbage trucks etc.  PHEVs would maintain the 5% rate.

Proposal:  Reduce GST to 0% on pure EVs, reinstating the 5% rate in stages as market share increases.  Increase the GST on fossil powered vehicles by 0.25% per year until the rate reaches 8%.  Plug-in Hybid EVs should continue to be taxed at 5%.

Canada’s gas and diesel is far cheaper that the G7 average (73% of the average in 2012)  Federal excise tax on gas has been 10c/l since 1995 and 4c/l on diesel since 1987.  Businesses do not pay GST, it is always passed on to the consumer.  Excise tax is paid by all, not just individuals. Increasing excise tax on fuels sends a clear signal to the larger GHG emitters.  The excise tax should be raised gradually to give businesses time to move away from fossil fuel.  Again this increase in tax should be used to fund electrification.

Proposal: Increase excise tax on gas by 1c/l per year, increase excise tax on diesel by 2c/l per year.  This increase should not stop until all 2050 climate change goals are achieved.

 

Auto Industry Support

Canada spends a lot of money supporting the auto industry.  Canada’s auto industry is critical to the economy of Canada and Ontario.  Local production and export of vehicles comes close to balancing imports.  Canada and Ontario subsidise key projects for all 5 manufacturers.  In 2017 Ontario and Canada each invested $100M in an engine plant for Ford  This was an investment in the past, and moving forward we need to be clear that we will only provide support for the future.  In 2017 over $600M was promised to support the auto industry and not a penny went to moving the industry away from fossil fuels.  Under the proposals here, Canada’s electrification rate will lead the US, providing opportunities for Canadian factories to benefit as the US catches up.

Proposal:  Any federal auto subsidies should be to support the move away from fossil fuels.

Messaging

Consumers lack information about the advantages of EVs and the real costs of owning a fossil fuel vehicle.  To reach the 50% goal, consumers need to be informed and educated.   We can start by forcing manufacturers to compare the emissions and costs of running a fossil powered vehicle with an EV and PHEV in the same class.  This should be on the window sticker and in the brochures. This would provide a direct message to the consumer that a fossil powered vehicle is going to cost $2000 more per year to run and emit 4-5 tonnes of GHG per year.

The current EnerGuide Label for Canada, how different would this be if EVs were included on the scale.

When politicians talk about climate change the language used is often weak and shows a lack of real leadership.  We need to lead the public with clear messaging.  We need to look at driving a fossil powered vehicle in the future much as we do smoking in public. There will be a time when driving a fossil car will be socially unacceptable.

Over time, governments moved from supporting tobacco companies to telling the public that they should consider giving up smoking.  This moved to clearer “Smoking Kills” messages and eventually to government suing tobacco companies for the health costs of smoking.  Today, people still smoke, but how many in a particular country depends largely on  government action.

The transition from fossil fueled vehicles to EVs will mirror this process, this will require that politicians be both honest and knowledgeable about climate change and the impact of not doing a lot more than we are planning today.

We hope that Ministers Garneau, McKenna and Prime Minister Trudeau understand that we have to move forward with a concerted effort to educate, advise and support consumers in making the right choices.

Action

If you have found this post interesting, can you support this plan by emailing  your MP and Minister Garneau, our minister of Transport?

Click here for a starting point for your email,  you can find your MP’s email address here. The email includes a BCC to our address so we can see your response. Add your MP to the CC and write your own thought on the subject.  Our experience is that Minister Garneau’s staff read the emails and respond, you can make a real difference to the conversation.

The City of Kingston – Doing Electrification Right

In October the City of Kingston approved a new Kingston Electric Vehicle Strategy.  This document lays out a series of actions Kingston will take to reduce the council’s own transportation related green house gas (GHG) emissions and how they will help citizens and visitors do the same.

We have an interest how Kingston does this besides as a good example for the City of Ottawa to follow. We lived in Kingston for several months in 2015 and 2016 preparing for our trip south on Kinship and we have a son studying at Queens so we visit several times a year.

The strategy addresses three “Target Areas”, let’s take a look:

Target Area 1 – Electrification of Municipal Fleet

Kingston is going to start with their fleet of cars and light commercial vehicles.  This a natural outcome of the current pricing and incentives available.  As older vehicles in this class come up for replacement, they will be replaced with EVs and Level 2 chargers will be installed. Later transit buses and other vehicle will come into play as options become available.  The City of Kingston is a member of the Canadian Urban Transit Research & Innovation Consortium (CUTRIC)  A consortium exploring options for electric buses in Canada, starting with a pilot project in York Region I suspect that Kingston will find that buses are available today that can meet their requirements.

Target Area 2 – Support Community Adoption and Use of EVs

Kingston has only a handful of charging stations today, although it is worth pointing out that on a per-capita basis they have more stations than Ottawa. Kingston is going to install 2 DC Fast Chargers and 25 dual level 2 AC chargers across the city.  This network will allow visitors and locals to charge in many handy locations.   There is a certain amount of “build it and then they will come” here, but the plan is sound and it will draw EVs to downtown which is under served today.  As visitors this is great for us, we have to charge in the West end today, well away from Queens, downtown and where our son lives.  Charging will be free at the Level 2 stations, the DC stations will be in the $10-15 range.

Kingston is also working on preparing the grid and having EV charging as an integral part of new builds for the City.

Target Area 3 – Support Municipal Employees Use of EVs

This target area is weaker than the other area, the City is planning on installing chargers for employees if there is demand.  For many Cities this is an area with real impact, hopefully Kingston will follow through on this.

Budget

Kingston’s initial capital investment in these programs is $796,000, representing 0.15% of the total 2018 budget.  If Ottawa was to allocate the same percentage we would be looking about $5,000,000.  Kingston is to be congratulated on their commitment, I will look to 2019 to see how their bus fleet electrification progresses.  Kingston spend about $82,000 per year supporting the operation of the chargers with cost reductions from fees reducing this over time.

As a Model for Other Municipalities

Using Kingston as a model is certainly valid for small-medium municipalities in Ontario.  The current provincial programs support the switch and similar sized cities could implement this strategy successfully.  Larger Cities can take much from the strategy, but it would need to be adapted to the larger organisation sizes involved.

Kingston is evidence that leadership and a relatively small budget commitment can go a long way to starting the process of reducing the GHG impact in a way that saves money.

 

A Response from the Ontario Ministry of Transportation to our EV Program Review

I received the letter below from Jamie Austin, the Director of the Transportation Policy Branch MTO. The original letter is here, I have made the text available below and I have added links to the programs Mr Austin discusses.  I am very grateful to Mr Austin for taking the time to respond and I think he is offering some insights into how the Province will address the issues we see with the EV programs.  As a community we still have a lot of work to do to address some of the policy gaps.

Our review is here, I suggest you read it first if you have not seen it before.

 

 

Dear Mr. Eglin,

Thank you for your email to the Honourable Steven Del Duca, Minister of Transportation dated October 5, 2017 and your emails regarding your review of Ontario electric vehicle programs. I appreciate your interest and enthusiasm for electric vehicles, and assure you that we share your ambitions for the electrification of transportation in Ontario. As a follow up to our brief discussion on these matters at the ITS World Congress in Montreal, I am happy to respond to you in greater detail on behalf of the Ministry of Transportation.

Electric Vehicle Incentive Program (EVIP) and Electric Vehicle Charging Incentive  Program (EVCIP)

I appreciate your positive feedback of EVIP and EVCIP, and acknowledge that there have been unfortunate delays in processing applications for these programs. While I am happy to report that demand for these programs has significantly increased over the last year, this led to a backlog in processing applications and making payments to program recipients. The Ministry of Transportation has recently committed new resources to the management of these programs in order to address both the current backlog and ongoing increased demand, and I’m pleased to say that this issue should be mitigated in the near future.

Electric Vehicle Chargers Ontario (EVCO)

EVCO was an application-based program that received an overwhelming response of over 200 applications. Applicants identified what they felt were good locations for the deployment of EV chargers. Because program recipients are responsible for the ongoing maintenance and operation of the chargers it is important that they themselves choose the locations, giving due consideration to the business plans under which they operate. Through the evaluation process, cost efficiency, appropriateness of the site and the number of stations per site were carefully considered, with a focus on the greatest possible connectivity of the network from among the eligible applications received.

As you have noted, there are a number of chargers that are planned under the EVCO program that are not presently listed on our website/program map. For a number of reasons, such as site conditions or host business decisions, some sites originally planned under the EVCO program have been determined to be unsuitable. In these cases wherever possible, EVCO program recipients have been proposing replacement sites to the government for consideration. These sites are added in to the EVCO map as they are approved for inclusion in the program. Where alternative locations cannot be found, projects will be modified to a smaller number of chargers/locations and the government will recover a portion of the funding that was allocated. The program is currently tracking towards the installation of nearly 300 level 2 chargers and over 200 level 3 chargers at approximately 250 locations across the province, and is currently two-thirds complete.

I note you have also observed some customer service issues with EVCO recipients. We do expect that EVCO recipients, and particularly operators of level 3 chargers, operate a 24/7 toll-free customer assistance number so that drivers can report outages and malfunctions, obtain assistance with point-of-sale and customer authentication, or to request assistance operating the charger. We are working with EVCO recipients to ensure they are meeting these expectations and we believe the issues that you have observed will improve over time.

Moving forward, we will be working to implement actions in the Climate Change Action Plan (CCAP), such as the rapid deployment of charging in government facilities, workplaces, multi-unit residential buildings, downtowns and town centres. CCAP includes up to $80 million over four years, for the continued deployment of EV charging infrastructure. We will be launching the first programming with these additional funds in the near future. As part of our program planning, we are monitoring the use of EVCO charging stations to better understand remaining service gaps. As we move towards our future plans, we will be sure to keep your suggestions in mind and welcome any additional suggestions that you may have.

I should also acknowledge the investments that the federal government is making in charging in Ontario, including projects under the Electric Vehicle and Alternative Fuel Infrastructure Deployment Initiative (EVAFIDI) and the Energy Innovation Program (EIP). We are also working closely with Natural Resources Canada to identify other opportunities for investment in Ontario.

Reduced Output Fast Chargers

Your observation about some level 3 chargers having reduced output in your review and your email addressed to Minister Del Duca is correct, as is your assessment about the root cause – that 50 kW is the threshold after which higher demand fees are incurred. This is in part associated with local distribution company (LDC) policies across the province, many of which will not permit secondary electrical services to a property for safety considerations. Accordingly, some EVCO recipients have reduced the total output of fast chargers to between 30 and 40 kW. Under a program like EVCO, the only alternative would be significantly fewer chargers or to have level 2 chargers installed. We understand your concerns about this matter and are currently determining the best approach to ensure that this information is communicated to the public transparently.

Cost of Charging

Recognizing that EVCO program recipients are responsible for all operating and maintenance costs of the chargers installed as part of their projects, the province did not specify the rate that would be charged by public charging stations. Fees are set by the owner/operator of the charger, and you will find a variety of fees across the province ranging from free to $17/hour, depending on the charging speed and other factors (i.e. parking included, etc.). We are monitoring the pricing for EV charging in Ontario at both EVCO and non EVCO chargers and reserve the right to intervene where the province determines fees at EVCO chargers are unreasonable.

With regard to kWh pricing for EV charging, there are additional regulatory considerations which fall under the authority of Measurement Canada, specifically under the Weights and Measures Act. The province of Ontario has had an open dialogue with the federal government on this through work related to the upcoming national Zero-Emission Vehicle (ZEV) Strategy, and we are monitoring the federal government for any regulatory changes or developments. Chargers installed as part of the EVCO program were required to have the capability to charge by kWh, so if and when these federal rules are changed EVCO recipients will have the flexibility to use kWh pricing if they choose.

EV Supply Management

Ontario has not opted to proceed with establishing a ZEV mandate, such as the approach taken in Quebec, as Ontario believes that a collaborative approach with a province-wide sales target that represents a collective goal will be the most effective approach. Through the Electric and Hydrogen Vehicle Advancement Partnership (EHVAP), the province is working closely with automakers, unions and other interested stakeholders to ensure that there is an adequate supply of EVs available in Ontario to meet demand over the next few years. We are also monitoring EV policies from other jurisdictions, including Quebec, with a particular interest on any potential impacts in Ontario.

In closing, I would like to thank you again for your feedback on Ontario’s electric vehicle programs. We are continually looking for opportunities to improve and adapt our programming to meet a fast evolving sector. I believe that we share the same enthusiasm for electric vehicles and optimism for the potential they offer to reduce greenhouse gas emissions, improve air quality, and lower transportation costs for all Ontarians. Thank you for your commitment to the electrification of transportation in Ontario.

Sincerely,

Jamie Austin Director

  1. Darryl Soshycki, Manager, Sustainable and Innovative Transportation Office, Ministry of Transportation

The Cost of EV Public Charging – The Untold Story

What if I told you that from now on, in order to fill up your gas tank you had to pay $5 to put the nozzle in, and then pay per minute to get some random flow of gas. You have no control over how fast or slowly the gas comes out of the nozzle, but when your time is up, if your tank is not full yet, you will have to put in another $5 to get more minutes of flow, and repeat until full. Sounds crazy, right?! Well, this is exactly what we have at the worst of the EV chargers. Over the summer we carefully logged our travels in our new e-Golf, and discovered that road-tripping costs at least as much in an EV as it does in a fossil. In fact, gas costs could actually be cheaper, depending on the chargers you use, and the time savings per fill-up are substantial.

How can that be true, you ask? Everyone knows it only costs a few dollars to plug into a public charger, where it costs $40 or $50 whenever you go to the gas pumps. Well, if you are like me, and amps and kilowatts are a foreign language, it’s easy to be fooled into a false sense of economy.

There is no standardization in the current charging infrastructure, so sometimes you can charge your car for free, sometimes you are quoted an hourly rate, sometimes a fixed fee, and sometimes a combination, such as a connection fee and a per minute rate. Is that confusing enough? It gets worse, because even if you could do the math to compare those rates, the big unknown is how much power the individual charger will put out (this is the technical part about amps – refer to Matthew’s recent post Ontario’s EV Program, a User’s Review” if you want a full explanation of that).

For our e-Golf’s efficiency rating of 17.4KWh/100kms, it takes over an hour, and costs more than double the price of gas to get enough KWh’s to drive 100kms! But I needed an app to do that calculation. If only charging was sold by the kWh – then all I would need to do is replace litres with kWh’s in the typical fuel efficiency equation of  “L/100kms” to make my comparison.

Time and Cost to add 100km range at a typical KSI DC Fast Charger

We did a calculation comparing the different charging networks encountered on our trips, and this is what we found when we compared apples to apples. Putting everything into the same units, the cost to travel 100 kilometres, and comparing that to the cost of the gas required to cover the same distance in an ICE vehicle, the costs are all over the place from free right up to “Ouch”.  Because of the wild west nature of EV charging, without careful planning and some inside knowledge  EV charging can cost way more per kilometre than gas!  And to add insult to injury, it takes a lot more time to fill up at a charger than at a gas pump.

To be clear, if you mainly charge at home, the amount added to your electricity bill is definitely way less than the cost of gas. And if you only take a few road trips a year, this is probably not really going to worry you that much. But for anyone who does not have access to a home charger, such as out-of-town travellers, and local condo and apartment dwellers, who must rely on public chargers, the economics of charging an EV are way out of line.

The Electric Vehicle Chargers Ontario (EVCO) program that is providing funds for Level 3 chargers across the province, failed to provide clear specifications for the output, so many of these are way more expensive than gas. The City of Ottawa’s proposed EV Charger Policy risks falling into the same category if it follows the same path. This is counter-productive to all their other programs aimed at promoting EV’s as a more environmentally sustainable mode of transportation. Never mind range anxiety, who would buy an EV if they knew that charging it while on the road might cost two or three times as much as gas, and add two or three hours to the trip?

It’s easy to see how consumers could misunderstand the cost of public charging, and I am afraid that the policy makers are no more clear on the concept than the rest of us. They need to identify their target markets, and provide reasonably priced charging options for each market segment in order to make EV ownership viable for all. The way things stand, city dwellers who do not have access to their own home charger, and tourists or long-distance travellers, both face a serious disincentive to EV ownership. And that is the untold story of EV public charging in Ontario. Who knew?

Something missing from all EV chargers