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The unintended consequences of banning petrol cars by 2035

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Expect used car prices to rise, for one thing

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For the average Canadian, one of the most impactful parts of the federal government’s new report Emission reduction plan was a 2035 commitment to ban all sales of private vehicles powered by internal combustion engines (ICE). Although there are exceptions for tractor-trailers and agricultural vehicles, in just 13 years it will become illegal to buy a new gasoline or diesel-powered car or truck.

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The idea, of course, is to reduce Canadian emissions by dramatically reducing consumer demand for fuel. But there are good reasons to believe that this policy will not necessarily have the effect expected by Ottawa. The National Post’s Tristin Hopper explains how the Liberal government’s plan to ban internal combustion engines may not have the desired effect.

Most Canadians could drive electric vehicles anyway by 2035

Zero-emission vehicles still represent a tiny fraction of new car sales in Canada. In 2020, only 3.5% of new vehicles registered in Canada were zero emissions. But global sales are growing so rapidly that it’s not unreasonable to assume electric vehicles could dominate the Canadian car fleet by 2035. In 2019, electric vehicles accounted for 2.6% of new car sales, rising to 4.3% in 2020 and 7.2% in the first six months of 2021. Sarah Hastings-Simon, a University of Calgary researcher on energy transitions, told the National Post that “the current rate of growth would see 100% share reached well before 2035.”

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Ottawa’s 2035 ban would only apply to new car sales; any internal combustion vehicle already on the road would be grandfathered. Rebekah Young, a car market analyst at Scotiabank, told the National Post that according to her calculations, in the years immediately following the ban, up to 50% of the Canadian car fleet could remain powered by fossil fuels. . “The large inventory of vehicles on the road today – with increasingly longer lifespans in recent years as manufacturing has improved – means that it will be many years before electric vehicles replace significantly the stock of ICE vehicles on Canadian roads,” she said. .

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Moreover, banning gas-powered cars by 2035 is not a particularly original Ottawa idea. Japan, Chile, China, South Korea, the UK and others have already pledged to ban or severely restrict electric vehicle sales by 2035. In Norway, which shares long-distance well known to Canadian motorists, electric vehicles already account for more than 80 percent new sales.

This is one of the main reasons why the federal government’s ban in 2035 did not cause so much panic among investors or the automotive sector. Most automakers were already assuming that they would primarily produce electric cars by the mid-2030s.

Charging infrastructure isn’t even close to being ready

There are approximately 12,000 service stations across Canada, from huge truck stops in southern Ontario to family-friendly gas stations scattered along the Alaska Highway. According to Natural Resources Canada, the country has 6,800 charging stations. Although it sounds comparable, keep in mind that most charging stations only have two or three ports and a “fill up” can take between 20 and 40 minutes.

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For now, the average EV driver is disproportionately likely to live in a single-family home that they can equip with a 240-volt charging station. But if electric vehicles represent 100% of all sales in 13 years, they will increasingly have to be owned by Canadians who live in condos or apartments. Any resident of the Canadian prairies is used to seeing extension cords hanging haphazardly on the sidewalks in winter to recharge the block heater of a vehicle parked on the street; these owners would likely have a similar problem finding a reliable place to charge their EV.

The other problem is that all of this is happening without any apparent plan to increase electricity generation in Canada. California, which enacted a similar ban in 2035 on internal combustion engines, is already experiencing severe power shortages that are force the state to rely on oil-fired power plants to avoid power outages.

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Expect used car prices to skyrocket

We are actually in the midst of a historic spike in used car prices. COVID-related supply chain shortages (notably semiconductors) have slowed vehicle production so much that if you own a 2018 car with less than 100,000 miles, you can probably return it at nearly 85% of the sticker price. Normally you would be lucky to get 50%.

There is no reason to believe that banning an entire class of cars would not impose similar price pressures on the Canadian used vehicle market, especially since the price of gasoline in 2035 isn’t going to be all that different from what it is now.

Another huge advantage of owning an internal combustion vehicle? It’s easier to fix. While it’s unclear what the next 13 years might bring, any electric vehicle owner currently looking to get their car repaired faces a shortage of qualified mechanics at best, and a Kafkaesque nightmare at worst. Battery replacement on early Nissan Leaf models often compete the cost of the vehicle itself, and Tesla is often criticized for a exclusive repair plan which can impose five-figure maintenance bills on problems that would be considered easy third-party fixes in a conventional vehicle.

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Internationally, the most egregious example of a sudden halt in the supply of new vehicles is in Cuba, where US trade bans from 1962 forced the country to relentlessly maintain a fleet of cars from the 1950s to the 21st century. The effect on Canadian roads won’t be as dramatic, but the average 2030s car owner will likely be pressured to pay more to extend the life of their car as it increasingly lasts of his generation.

Buckle up for a “last hurray” of gas-powered vehicles

Ten years ago, when news broke that Ford was going to discontinue production of the Crown Victoria police interceptor, Toronto police immediately hoarded as many cars as they could possibly buy. All of the police cars thrown in as replacements were deemed too small by Toronto cops, so they filled a roof with over 300 Crown Victorias.

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Police cars will be exempt from the 2035 ban, but with dozens of car brands now on the verge of being phased out for good, similar episodes of vehicle hoarding could be about to hit the Canadian auto market.

Especially when Western governments are phasing out gas-powered vehicles just as automakers are producing some of the best internal combustion cars ever made. “It’s the absolute golden age of internal combustion cars right now,” said Caleb Bernabe, co-founder of VINN, a Canadian online marketplace for new and used vehicles.

Take the 2021 Ram TRX, called “the most powerful street-legal half-ton truck to ever roam the earth.” Or the sudden spike in production by luxury automakers absurdly powerful vehicles with V10 and V12 engines. Cadillac plans to go all-electric by 2030, but just before ditching gasoline, they’re releasing a 700 horsepower sedan.

And while sales of electric vehicles are indeed on the rise, it’s clear that Canadians still love the gas guzzlers. Last year alone, pickup trucks represented 25 percent private vehicle sales in Canada. That year also saw a massive increase in sales of SUVs, crossovers and other fuel-intensive vehicles.

In short, if Canadian motorists are going to go electric by 2035, many appear to be ready to burn as much fuel as possible before that happens.

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