Variability in costs of electrifying passenger cars in Canada

Abstract

The high cost of purchasing electric vehicles (EVs) compared to internal combustion engine vehicles (ICEVs) is a major barrier to their widespread adoption. Additionally, the price disparity is not the same for all households. We conducted a total cost of ownership (TCO) analysis to compare the net present value of EV versus ICEV ownership for various household categories across Canada. We observed spatial and behavioral factors, including variations in costs of electricity, temperature, household archetypes and their purchase decisions, and access to charging infrastructure. We found that EVs are more cost-effective than ICEVs for certain daily driving distances, but typical households in Canada generally do not drive enough for lifecycle costs of EVs to be less than ICEVs. The province of Quebec has the most favorable conditions for EV ownership due to high purchase subsidies and low electricity prices. Variability in costs across other provinces and territories is mainly due to differences in rebates, electricity and gasoline prices, and tax rates. Our findings have implications for policymakers and consumers. For consumers comparing ICEVs to EVs based on a fixed budget, which may be consistent with how many households frame their purchase decision, willingness to accept smaller, non-luxury EVs can result in large cost savings. We also find that although temperature variation has a minimal effect on TCO, it does impact the “number of charge-ups”—a metric that we introduce to compare how many charging cycles a user may expect over the lifetime of a vehicle. The policy implication of this would be a need to consider regional differences in cold weather patterns when planning charging infrastructure deployment and the extent to which households in shared dwellings may face additional costs. Lastly, our findings strengthen the argument that equitably decarbonizing transportation will also require investment in strategies other than electrifying personal vehicles.