Canada’s Electric and Hybrid Vehicle Sales Could Lead to Peak Gasoline Demand, BMO Economist Says
The Future of Electric and Hybrid Vehicles in Canada: A Shift Towards Sustainability
In recent years, the Canadian automotive market has seen a significant rise in the sales of battery electric vehicles (BEVs), plug-in hybrid vehicles (PHEVs), and hybrid vehicles. According to Statistics Canada, these eco-friendly vehicles have accounted for around 20 per cent of the overall market for new vehicle sales in Canada for three consecutive quarters. This upward trajectory has caught the attention of economists, with some predicting that Canada could hit a peak in gasoline demand this decade due to the increasing popularity of electric and hybrid vehicles.
Erik Johnson, a senior economist at BMO Capital Markets, believes that the market share of BEVs, PHEVs, and hybrids will continue to grow, leading to a decline in gasoline demand in the coming years. Johnson points to the fact that combined sales of these vehicles have increased by more than 50 per cent compared to the previous year, indicating a strong shift towards more sustainable transportation options.
Despite a slight dip in sales in the first quarter of 2024, Johnson remains optimistic about the future of electric and hybrid vehicles in Canada. He acknowledges that the growth rate may slow down as the market becomes more saturated, but he believes that the trend towards better fuel economy and environmental consciousness will continue to drive the demand for these vehicles.
One of the key factors influencing the growth of the electric and hybrid vehicle market is the price point. Johnson notes that until more affordable models hit the market, growth is likely to be gradual. Additionally, factors such as mortgage renewals at higher rates and other cost-of-living challenges may also impact consumer purchasing decisions.
The response to recent tariffs imposed on Chinese EVs in the U.S. and Europe will also play a role in determining the pace of growth in the Canadian market. Johnson emphasizes the importance of government policies and incentives in promoting the adoption of electric and hybrid vehicles.
Overall, the future looks bright for electric and hybrid vehicles in Canada. As more consumers become aware of the environmental benefits and cost savings associated with these vehicles, the shift towards sustainable transportation options is expected to continue. With the right policies and market conditions in place, Canada could soon become a leader in the adoption of electric and hybrid vehicles.
For more insights on the latest trends in the automotive industry, follow John MacFarlane on Twitter @jmacf and download the Yahoo Finance app for the latest updates on electric and hybrid vehicles. Let’s drive towards a greener and more sustainable future together!