Electric vehicle prices would need to drop by nearly a third for Environment Minister Steven Guilbeault’s ambitious sales mandate to be feasible, according to a new report from the Parliamentary Budget Office. Blacklock's Reporter says the mandate requires that 60% of new passenger vehicle sales be electric by 2030, but the Budget Office raised concerns about the economic viability of this target.The report, titled Electric Vehicle Availability Standard: Potential Impacts On Ownership Costs And Charger Supply, states, “We estimate the relative ownership cost of battery electric vehicles would need to decrease by 31% to meet the zero-emission vehicle sales target of 60% in 2030.” The report suggests that either the price of electric vehicles must fall significantly, or other adjustments — such as raising the cost of internal combustion engine vehicles or increasing government subsidies — would be necessary to meet the mandate.Guilbeault has mandated that electric vehicles account for 20% of new car sales by 2026, rising to 60% by 2030, with a complete ban on the sale of new gasoline-powered cars by 2035. Despite Guilbeault’s assurances that this shift would save Canadians money in the long run, the Budget Office’s findings challenge this narrative.Guilbeault previously claimed, “This will help Canadians with the cost of living. Once you drive a car off the lot, the savings on fueling and maintenance costs are enormous.” However, a December 20 Regulatory Impact Analysis Statement from the Department of Environment contradicted this, projecting over $17 billion in net costs for drivers due to the mandate.The Analysis Statement estimated, “Incremental zero-emission vehicle and home charger costs of $54.1 billion from 2024 to 2050 for consumers who switch to zero-emission vehicles in response to the amendments,” while consumers would only realize $36.7 billion in net energy savings over the same period. The statement also highlighted that certain electric vehicle types, such as electric pickups and plug-in hybrids, are unlikely to reach price parity with traditional vehicles, potentially leading to higher costs for drivers.The report further noted that low-income Canadians, rural residents, and northerners might face greater challenges in transitioning to electric vehicles due to high costs and the impact of cold temperatures on battery performance. The analysis did not provide specific cost estimates for these groups but emphasized the disproportionate impact they could experience.
