As many as six in 10 Canadians will buy a new vehicle within the next five years and would prefer a greener alternative to carbon-emitting gasoline-powered vehicles. But most will end up settling for a gas-powered one instead of electric due to higher financing costs, delays in delivery, and concerns over battery range and charging reliability, finds new KPMG in Canada poll research.
“It’s not that EVs have lost their appeal but rather that lack of inventory and long waiting lists over the past couple of years are giving consumers reasons to pause,” says Damiano Peluso, Partner and National Automotive Industry Leader, KPMG in Canada. “And now with expectations of a recession and sharply higher financing rates, our poll research shows consumer sentiment has shifted to pragmatism over ‘the machine of a dream’.
“As more EV models come to market this year and next, we will see sales pick up but a lot hinges on the price point and how well these persistent concerns about range and charging infrastructure can be addressed,” he says.
Key Poll Highlights:
- 61 per cent of Canadians plan to buy a new vehicle within the next five years, of whom 42 per cent will buy within the next two years, or by 2025
- More men (67 per cent) than women (56 per cent) will look to buy a new vehicle within the next five years
- More than two thirds (67 per cent) planning to buy within the next five years want to spend less than $50,000 on a new vehicle: 42 per cent, in the $30,000 to $49,999 price range, and 25 per cent, less than $30,000. Twenty-one per cent say they are willing to spend $50,000 to $74,999 on a new vehicle. The remaining 12 per cent are willing to spend more than $75,000.
- 58 per cent who plan to buy a new vehicle by 2033 say they want a greener vehicle: hybrid (30 per cent), a battery EV (15 per cent), and a plug-in EV (13 per cent). The remaining 42 per cent prefer a gas-powered internal combustion engine (ICE) powertrain.
- The primary factors preventing Canadians from buying an EV were:
- 33 per cent say their EV hesitancy relates to many factors combined: the cost of an EV, charger anxiety, including the lack and reliability of charging stations, limited EV availability and long-wait times, and scepticism over battery technology
- Over a quarter (26 per cent) say EVs are too expensive
- 14 per cent cite charger anxiety and lack of infrastructure
- 8 per cent say limited EV availability and long-wait times are preventing them from buying an EV
- 7 per cent say the primary reason is that they don’t trust battery technology
- 81 per cent say rising interest rates are making EVs cost prohibitive, shifting them out of their price range. Still, two thirds (67 per cent) expect financing rates will fall or even normalize in a couple of years by the time they purchase an EV, reducing this barrier to ownership.
- 67 per cent would buy a new vehicle directly from the automaker, bypassing auto dealerships
- 81 per cent feel that auto dealerships are under immense pressure to improve sales and service especially if OEMs start selling directly to consumers
- 30 per cent couldn’t wait a year or more for an EV or PHEV so they purchased a used gas-powered vehicle in the interim
- 44 per cent won’t wait more than a year for an EV and 47 per cent won’t wait more than a year for a PHEV, among those who want to buy an EV and PHEV
Market Shift
There is also opportunity for automakers and auto dealers to pick up market share. Almost half of the market is open to change, the poll shows. Only 54 per cent of respondents intend to buy a ZEV that’s the same brand as their current make. With many new EV models set to debut this year, the top three brands that prospective Canadian EV buyers say they’re most likely to purchase now are: Toyota, Honda, and, dropping from top spot last year to third, Tesla.
“While our survey shows that most Canadians want to buy an EV that’s made in North America, important decisions are still being made on battery, assembly, and parts manufacturing locations,” said Tammy Brown, Partner and National Leader, Industrial Markets, KPMG in Canada. “As a result, the domestic market may not be able to meet the federal zero-emission vehicle targets, which may force Canadians to buy a greater share of imported electric vehicles.”
“The global auto industry took nearly 13 decades to perfect the internal combustion engine and are now trying to meet consumer and regulatory expectations for electric vehicles in just two decades,” said. Brown.
