According to S&P Global Mobility, declining Tesla (TSLA) sales in the first quarter of 2023 contributed to a decline in Canada’s registrations of zero-emission vehicles (ZEVs) from a record high at the end of last year.
According to S&P’s study, Elon Musk’s electric car brand typically accounts for 40% to 50% of ZEV sales in Canada. The quarter saw a 30% decline in Tesla registrations, bringing the company’s overall ZEV market share to 30%, its lowest level since Q3 2021. According to S&P, decreases in Ontario and Quebec were the main causes of this.
According to the survey, Ford’s (F) market share in Canada’s ZEV market fell by four percentage points in the first three months of 2023.
ZEVs, which include battery electric, plug-in hybrid electric, and hydrogen fuel-cell vehicles, lost a full percentage point of their market share in Canada, dropping from 10.2% in the fourth quarter to 9.1% in the first.
The dip in the first quarter, which the report’s authors attributed to increased inflation, “suggests potential challenges ahead, even though the fourth quarter was a significant milestone for ZEVs in Canada.” When pricing is an important consideration for consumers, these considerations may make it more difficult for ZEVs to become widely adopted.
The Consumer Price Index rose by 4.4% in April, undermining the Bank of Canada’s efforts to keep prices from rising. The average cost of a new car was $61,821 in the first quarter of 2023, per Autotrader.ca’s price index.
Recently, Scotiabank issued a warning that Ottawa’s ambition to end the purchase of conventional light-duty vehicles by 2035 could be jeopardized by high borrowing prices and persistent inflation.
ZEV sales by the province in Canada
ZEV registrations in Ontario fell by the most in Q1, from 8.3 percent in Q4 to 6.2 percent, representing a quarter-over-quarter decrease of 25%.
Earlier this month, a General Motors (GM) executive referred to the most populous province of Canada as a “laggard,” implying that the removal of government subsidies had caused the province to fall behind on sales.
With more than 25 percent of all new registrations in the nation coming from British Columbia, ZEV adoption there has remained high. ZEV registrations in the province comprised 19.7% of all new vehicle registrations in Q1, a modest decrease from the 20.1% recorded in the previous quarter.
In Quebec, ZEVs recorded a 14.4% share in Q1, a tiny decrease from the 14.6% recorded in Q4. Single-digit increases were seen on Prince Edward Island and Nova Scotia.
S&P stated in the report that “looking longer term, the Q1 results are a bump in the road.” With [approximately] 300,000 ZEVs in the nation, the market share of ZEVs is expected to continue expanding in Canada and is intended to reach 16% in 2024.
