When a friend told Seymore Applebaum about the efficiency of plug-in hybrid electric vehicles, he was intrigued.
Applebaum, who lives north of Toronto, was on the market for a new car. While safety features were paramount, the high cost of gasoline couldn’t be ignored.
So in January, it traded in its sedan for a new plug-in hybrid (PHEV), a vehicle that can run on both electricity and gasoline. Applebaum says he can travel nearly 30 miles on battery power alone, more than enough to get around town.
On a recent trip downtown, he recalled, “I drove about 30 miles … and all I used was the electric motor and the electric battery that runs the car.”
“Normally, on a day like that, [it] would be comparable to $10, $15 of the cost of driving.”
Auto industry analysts say rising gasoline prices are driving more consumers to seek out electrified and electric vehicles (EVs).
Prices at gas stations have skyrocketed across Canada in recent weeks. Estimates suggest that Vancouver could see the highest prices in the country this weekend, which could affect $2.34 per liter of regular fuel. According to fuel price tracker GasBuddy, the national average as of Sunday afternoon was just under $1.98 a liter.
“Canadians are motivated by high fuel prices, but they really believe this is the new normal,” said Peter Hatges, national automotive sector leader for KPMG Canada. pointing to a recent survey by the consulting group.
“When consumers believe it or perceive it to be true, they will modify their behavior around the type of vehicles they buy.”
Kevin Roberts, director of industry insights and analytics for US-based online vehicle marketplace CarGurus, said cross country check has seen a similar trend.
“As gas prices rose, interest in electric vehicles increased at about the same rate with only a couple of days lag for both new and used vehicles,” he said.
But even as interest in electric cars surges, experts say too few options and too high prices mean they haven’t quite hit the mainstream.
While consumers in North America prefer larger vehicles like SUVs and trucks known for their utility, EVs tend to come in compact or sedan-style models. EV range, and the availability of chargers, are also considerations for many Canadians, Hatges said.
However, huge investments in electrification by major automakers are starting to pay off.
A greater variety of models and sizes will hit the market in the coming years, analysts say. Battery life is also improving, with several models capable of traveling more than 400 kilometers on a charge, according to manufacturer estimates.
“It’s absolutely a turning point,” Hatges said. “I think there is a confluence of factors pointing towards an alternative to the internal combustion engine.”
The big test for consumers will be whether manufacturers can cut prices enough to lure customers to the showroom and electric vehicles on the road, said Grieg Mordue, associate professor and ArcelorMittal chair in advanced manufacturing policy at the University McMaster in Hamilton, Ont.
While a handful of models start under $50,000, many stray far from that figure, with some selling for over $100,000.
The sweet spot for Canadian shoppers? Between $35,000 and $45,000, says Mordue. The key to reaching that price is mass production, she added.
“We need North American production of vehicles at that level, and we need high-volume vehicles, not small niche vehicles where 10,000 or 15,000 of them are sold a year, because that’s a lot of the vehicles that we have right now, Tesla notwithstanding everything,” Mordue said. Check.
In April, GM announced a $2 billion investment, with Ontario and federal government supportthat will see electric vehicles rolling off assembly lines in Oshawa and Ingersoll, Ontario, starting this year.
Stellantis, which owns brands like Dodge and Jeep, is similar invest billions in electrification at its plants in Windsor and Brampton, Ontario.
However, Mordue cautions that as plants start producing electric models, it will take time for them to catch up to current production of gasoline-powered vehicles.
Focus on fuel efficiency
While interest in electric vehicles may be on the rise, Hatges predicts a shift for gasoline vehicles as well.
“I think you will see an effort to make cars lighter, more fuel efficient, even when it comes to electricity,” he said. “Heavy duty vehicles use more energy to move down the road, whether it’s electricity or fuel.”
And as long as gas prices remain high, the market could see a shift from SUVs and trucks, which consumers and manufacturers have favored in recent years, to models that consume less gas.
“We have a fascination with trucks and SUVs, Americans do, and there are a lot of them on the road now… I don’t see that changing any time soon,” he said.
“But in the medium or immediate term, will you see a change or a reconsideration of cars that are more fuel efficient? I think so. The price at the pump is very, very significant.”
Applebaum touted the flexibility of a plug-in hybrid and said he’s not at all concerned about range. And while his PHEV cost more than a comparable non-electric model, trading in his previous vehicle combined with fuel savings over three or four years made it affordable, he said.
Now that gas prices are higher than they were in January, “that’s even more true,” he said. Check.
Now, he says his friends are taking notice.
“They say the next car they buy will be an electric car.”
Written by Jason Vermes with files from Abby Plener.