The federal government wants electric vehicles to be the obvious choice — and eventually the only choice — for Canadian drivers, but so far that doesn’t appear to be the case.

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At Raman Grewal’s Kia and Subaru dealership in Whitehorse, Yukon, for example, there is considerable demand for EV and plug-in hybrid vehicles, but many of his customers still have “range anxiety.” That means they’re worried the battery will die before they can find a charging station, and that they’ll be left stranded on the Alaska Highway between B.C. and the Yukon.

“Currently, EVs work if you are commuting in around (the) 200 kilometres per day range,” Grewal wrote in an email. “(Especially) in our cold climate in the north. Some customers are living at greater distances or are living off grid without hydro.”

In urban centres, which currently have lower rates of EV adoption than the surrounding suburbs, there are other issues, said Jimmy Hearn, author of a recent report by S&P Global that found zero-emission vehicles accounted for a record 13.3 per cent of new vehicles purchased in the third quarter of 2023.

Urbanites tend to rely on street parking where it is harder to find EV charging stations, Hearn said, whereas suburbanites can install charging stations at their homes.

Even in Montreal, which is home to more than 2,000 public charging station ports, such concerns are front of mind, according to Norman John Hébert, president and chief operating officer of Groupe Park Avenue, which operates a Mercedes-Benz dealership in the city that sells EVs. Wait times can be an issue, too. And then there’s the sticker price.

“Generally, our customers find EV prices to be too high compared with an equivalent format of ICE (internal combustion engine) vehicle,” Hébert said in an email.

The average sticker price of an EV is $73,500, according to Canadian Black Book, around $6,000 more than a new gas powered car, which tops $67,000 according to a recent price index report by AutoTrader, an online car marketplace.

Though S&P forecasts EV market share will only continue to grow, reaching 18.4 per cent by the end of 2024, there are signs consumer demand is not keeping up with soaring expectations.

In recent months, some automakers have scaled back EV production targets, citing sluggish sales and faltering demand. Ford Motor Co. recently announced that it would reduce production of its F-150 Lightning electric pickup truck, because demand was lower than expected. General Motors Co. announced that it, too, would slow plans for electric truck production, delaying the launch of a Detroit-based factory to 2025.

As Ottawa embarks on its ambitious mandate of having 100 per cent of all new car sales be electric by 2035 — a target that goes hand in hand with tens of billions of dollars in subsidies for EV supply chain projects — getting consumers on board is seen as critical by many in the industry. If they can’t be convinced EVs are the best option, reaching those goals will be an uphill climb.

“We have to make sure the consumer is coming along at the pace required to support this transition,” said Brian Kingston, president of the Canadian Vehicle Manufacturer’s Association.

To ensure there is adequate demand for EVs, the government must enhance the grid, provide consumers with incentives, keep investment flowing into the North American EV supply chain, and build more charging infrastructure, he said.

“Achieving these very aggressive sales targets requires a ‘Team Canada’ approach to boosting EV sales across Canada,” he said.

Without it, governments could be forced to rely more heavily on the costly subsidies that continue to play a major role in convincing consumers to buy EVs.

People who buy EVs from BMW Aurora, a dealership north of Toronto, generally qualify for federal incentives of up to $5,000, said Thomas An, assistant sales manager.

At Grewal’s dealership in Whitehorse, meanwhile, customers can take advantage of the federal government rebate of around $5,000 on purchases and leases, plus a provincial rebate of up to $5,000 — a perk that is unavailable in Ontario because that province’s $14,000 rebate was eliminated by Doug Ford when he became premier in 2018.

Some of the variance in demand for EVs across dealerships — they account for 20 per cent of car sales for An, but 43.5 per cent for Grewal — is likely due to the differences in subsidies, said S&P’s Hearn, noting that Quebec and B.C., which lead the pack in terms of EV sales, also both have strong EV incentives.

In the third quarter of 2023, EV sales made up around 26.4 per cent of all new vehicle registrations in B.C., where consumers can get up to a $4,000 rebate on a new EV, and 22.8 per cent of sales in Quebec, where consumers can get an even higher rebate of $7,000.

“If you compare Toronto’s ZEV (zero-emission vehicle) growth to Montreal and Vancouver, Toronto … is trailing behind those two smaller cities,” said Hearn. There are around 8,800 EVs in Toronto, compared to 10,100 in Vancouver and 12,100 in Montreal, likely because Ontario lacks a provincial EV incentive, notes the S&P report.

“From what I see in the data, the vehicles that people are registering in British Columbia and Quebec are the vehicles that meet the provincial ZEV initiatives and rebates as well as the federal rebates,” Hearn said. Customers are stacking the incentives in order to get the most bang for their buck.

While Bibra said recent news coverage suggests EV uptake at some dealerships has slowed, the big picture data says otherwise.

“When we look at just the hard facts, the sales continue to increase,” she said. “It’s really important to look at what’s happening as an overarching trend.”

Indeed, new ZEV sales fluctuate year to year, but are increasing on the whole: they totalled 55,600 countrywide, up from just 5,200 in the same quarter in 2017.

At the national level, Canada has made good progress in securing investments in the EV supply chain, part of its bid to become an EV superpower, said Kingston.

The signature investments so far include Volkswagen AG’s plans to build a battery plant in St. Thomas, Ont., supported by $13 billion in government funding and Stellantis NV-LG Energy Solution Ltd.’s battery plant in Windsor, Ont., supported by $15 billion in funding.

Others include Ford’s plan to retool its factory Oakville to assemble EVs and battery packs, as well as a $35-million investment by Bobaek America Inc., a Korean electric vehicle parts manufacturer, toward the construction of an EV factory in Windsor.

But Kingston and a number of dealerships pointed to the need for better infrastructure as a key stumbling block to widespread adoption.

“The government should definitely implement more EV charging infrastructures in the cities,” said An.

Grewal, too, called for better charging infrastructure on the Alaska Highway.

Though most customers appreciate the savings on gas, which amount to around $3,000 a year, EVs are still only the favoured option for a particular subset of consumers: those commuting short distances, those who are willing to wait several months to over a year for their car, and those who are “innovators that are interested in new technology,” said Hébert.

Many of his customers seem willing to pay for EVs that have found a “sweet spot” for pricing, such as the Audi Q4 e-Tron, which retails for $64,000, the BMW i4 which retails for between $55,000 to $80,000, and the Volvo XC40 Recharge, which starts at around $60,000.

But it’s not enough to cater to Canadians with means, said Bibra; the federal government needs to work harder to reach “mainstream” Canadians who fall into the low-to-middle income brackets.

Simply mandating that 100 per cent of car sales be electric by 2035 does not ensure the goal will be met, said Kingston.

“I’d like to see a more co-ordinated approach led by the federal government but with other levels of government participating — provinces and municipalities — on a very well-thought-through plan to achieve the targets that the government has established,” Kingston said. “We can’t do this on our own.”

• Email: mcoulton@postmedia.com

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