Electric Vehicles and COVID-19
November 12, 2020
It should come as no surprise to anyone that 2020 has been a remarkably challenging year for the automotive industry, just as it has been for so many sectors. Not only were new car sales significantly hit hard after COVID-19 arrived in BC, but one of the resulting effects of the pandemic was the postponement of our beloved Vancouver International Auto Show to ensure the health and safety of our community.
From there, we saw sales numbers take a sharp decline in BC. In Q2, total new light vehicle sales declined by 45% compared to 2019. But as we concluded Q3, things began to take a more positive turn, with light vehicle sales down just 3.9% compared to the same period a year previous – an outstanding improvement from what we were seeing earlier in the year.
As you know, I am proud of the work we have done in BC over the past decade to increase EV sales. At the end of last year, 10% of all light vehicle sales in BC were zero-emission vehicles – which brought the total number of EV’s on BC’s roads to more than 39,000. As of the end of 2019, BC also hit a huge landmark having the highest per capita EV sales in North America.
I believe much of this increase can be attributed to the CleanBC Program, which provides a point of sale purchase rebate of up to $3,000 from the Provincial Government and is administered by the New Car Dealers Association of BC. The CleanBC rebate applications almost doubled in 2019, surpassing 2018’s record number of applications.
So, do we need to be concerned about how the pandemic will affect our efforts on the EV front? If we look at how the pandemic is affecting EV demand globally, I don’t think we need to be overly worried about long term impact on the EV sector.
According to a study by McKinsey & Company, an global auto slowdown won’t hurt overall EV demand. For many countries, consumer demand for EVs has remained much more stable than demand for other vehicles during the crisis. While the overall number of sales has declined in China and Europe, the market share for EVs has risen.
In contrast, the United States has seen consumer demand drop. Globally, EV manufacturers that offer online sales have seen particularly high demand, as the lockdowns have inhibited in dealership shopping. And though in BC dealerships have remained open, businesses have adapted in these times.
But we cannot take this information at face value. There are many factors beyond the pandemic that can be attributed to the United States experiencing a difference in demand. For example, as of June 2020 the United States offered no incentives to purchasing EV’s, while China offers a $2,000 incentive and many countries in Europe offer an incentive of $10,100. I am much more inclined to believe that BC would follow a model alongside China and Europe because of our similar incentive programs.
Another factor to consider is charging stations. As we know too well, one of the main considerations for consumers purchasing EV’s is related to range-anxiety or concern that they will run out of battery. By ensuring there are ample charging stations, we are able to wade off consumer concerns and make the EV model more accessible. In 2019 China installed 250 new public charging stations, Europe installed 45, and the United States added 26. In BC alone, 26 new Level 3 fast chargers were added in 2019.
While this is not a perfect model to predict the trajectory of EV sales in BC in the future, it is one that gives me immense hope. As sales continue to climb, it is important to remember the benefits of purchasing EV’s.
Blair Qualey is President and CEO of the New Car Dealers Association of BC. You can email him at firstname.lastname@example.org
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