EV sales in Canada were up 39 per cent for the first nine months of 2024 compared to the same period last yearJustin Tang/The Canadian Press
Last year was the best year for global electric vehicle sales. According to Rho Motion, a London-based EV research firm 17.1 million EVs were sold last year, a 25-per-cent increase compared to 2023. December also marked the fourth consecutive month of record sales with sales of 1.9 million EVs worldwide.
Although fourth-quarter EV sales figures for 2024 aren’t yet available from Statistics Canada, sales were up 39 per cent for the first nine months of 2024 compared to the same period last year.
Cara Clairman, chief executive officer of Plug’n Drive, a Toronto-based non-profit that promotes EV adoption, believes the beginning of 2025 will continue to be strong.
”A lot of the [manufacturers] are offering a $5,000 rebate until the end of January, and you’re going to see people who were on the fence or thinking about it go run and get one,” Clairman says.
Ford, General Motors, Nissan and others initially offered rebates to customers purchasing EVs to counter the abrupt end of federal EV rebates.
Rising EV sales come despite automakers such as General Motors, Toyota, Volvo and Ford scaling back production targets and shelving plans for new electric models.
While the Trump administration has scrapped federal EV incentives and rolled back emission targets, 2025 will still likely set another global sales record, according to S&P Global Mobility.
“[Sales] might be a little slow in the summer but they will pick up,” Clairman believes. “We definitely don’t need to panic and cancel mandates. To me, it seems counterintuitive.”
Turning back now would be a major challenge given the massive investment in battery production and the EV supply chain, a proliferation of focused startups innovating with solid-state batteries and electric motors, and commitments from many major car companies.
As they say in poker, the industry is pot-committed.
American carmakers such as Ford, GM and Stellantis, among others, invested a combined $146-billion in manufacturing, designing and engineering EVs over the past three years, according to the Center for Automotive Research, a non-profit organization in Ann Arbor, Mich. As a result, as reported by The New York Times shortly after the U.S. elections in November, those automakers are hoping the new administration will keep the requirements to sell EVs in place.
The Alliance for Automotive Innovation, which represents 42 car companies that produce nearly all the new vehicles sold in the United States, wrote in a letter to then president-elect Donald Trump that for the auto industry to remain successful and competitive it needs “stability and predictability in auto-related emissions standards.”
Even without consumer rebates, a sales slowdown would likely only be temporary, experts say, given the number of new facilities and production plants being built across the U.S. and Canada to help support the growing EV supply chain.
Rivian, an American manufacturer of electric vehicles, recently received a conditional commitment from the Department of Energy for a loan of up to US$6.6-billion to accelerate the development and manufacturing of its electric vehicles.
Honda has made a similar commitment in Canada with a $15-billion commitment and proposals to build an EV production plant, a battery plant and facilities that produce battery components such as separators and cathode materials. The plants, to be built in Ontario, will create thousands of new jobs and elevate Canada’s status as a leader in the production and manufacturing of electric vehicles and batteries.
Hayato Mori, assistant vice-president of business development for Honda Canada, says the company hasn’t changed its plans for electrification production in Canada.
“Honda Canada is committed to reaching our global goal of carbon neutrality by 2050 with 100-per-cent global EV sales by 2040,” he says.
China is the world’s largest driver of global EV sales, accounting for 11.1 million of them in 2024 according to Rho Motion. With its rapid pace of development, EVs are quickly reaching price parity with gas cars in China. In its 2024 Global EV Outlook, the International Energy Agency (IEA) estimates that 60 per cent of the EVs sold in China are already cheaper than their gasoline counterparts.
China’s rapidly growing EV industry has global automakers scrambling to keep up. The European Union was the only region where EV growth slowed, attributable to Germany which recently cut its EV subsidies, causing a decline in sales. And while Volkswagen has managed to keep its factories open, it plans to cut more than 35,000 job by 2030 to save €15-billion ($22.6-billion). Growth rose, according to Rho Motion, by more than 20 per cent compared to 2023 in the U.K., which hasn’t followed suit with the EU by imposing tariffs on Chinese EVs.
Goldman Sachs predicts battery prices, which are already declining, will drop 50 per cent by next year from what they were in 2023. It attributes the drop to the decreasing cost of cobalt and lithium and innovations that have made batteries up to 30 per cent more energy dense. The investment firm says at that price, electric cars will “achieve ownership cost parity with gasoline cars on an unsubsidized basis.”
Clairman sees similar trends with EV pricing in Canada.
“The price of the vehicles are coming down,” Clairman says. “You can get a [Chevrolet] Equinox for less than $50,000.”
Innovation from startups is also fuelling rapid change in electric motor and battery technology. DeepDrive, a Munich-based tech startup, has designed a dual-rotor motor that is so efficient it allows for EV designs that use a 20-per-cent smaller battery. The company is already working with leading automakers.
There’s similar electric-motor innovation happening in North America with Enedym, a startup based out of the McMaster Automotive Research Centre in Hamilton, and QuatumScape, a U.S.-based startup that’s partnered with Volkswagen and has developed a solid-state lithium metal battery with a proprietary solid ceramic separator.
Emerging markets like Vietnam and Thailand are also showing growth, according to the IEA report, and economic policies in China and India are expected to keep driving rapid global electrification.
At its current growth pace, EV adoption is estimated to avoid the use of 10 million barrels of oil a day by 2035, equivalent to the amount used each day on U.S. roads.
Plans to build more plug-in hybrids and gasoline models and focus on a mix of powertrains rather than going all in on electrification, shows the industry is adapting to demand and taking a measured approach.
It doesn’t mean that years of progress and investment in electric vehicles are being reversed. While the biggest challenges are yet to come, it’s clear that even with setbacks, the future of the next generation of electric cars is set to begin.
“[EVs] are just better cars,” Clairman says. “They’re more efficient, more fun to drive. I would never go back.”