Market share of EVs rises more quickly in Canada than in US

Though it has been well reported that buyers in Europe and China
have adopted BEVs more quickly than US buyers, the same is true
when looking at the US versus Canada. In Canada, the presence of
provincial incentives in Quebec and British Columbia seem to be
contributing to overall Canadian electrification adoption, but also
to the representation of BEVs in those two provinces. In the US,
with its 50 states and more complex market, state-level incentives
seem to have less impact on the geographic distribution of BEV
registrations.

We have taken a dive into the registration data in Canada and
the US from January through April 2024, comparing it against the
same periods of 2021 through 2023, to explore differences between
the two markets. In both countries, both BEV and PHEV share
continues to expand and the volume of registrations grows.

However, in the US growth is happening more slowly than in
recent years. In Canada, BEV registrations improved 57% from 2023
to 2024, bringing share up as well. In Canada, PHEV registrations
increased 75% over the first four months of 2024. In the US, BEV
market share and volume growth have both slowed. The US saw about
25,000 more BEVs registered in January to April 2024 than the same
period of 2023; volume increased about 137,000 units in the January
to April 2023 period compared with 2022.

Canadian provincial incentives could reduce BEV price
by CA$12,000

Canada's overall vehicle market is notably smaller than the US
market, but broader application of the Canadian national zero
emissions vehicle (ZEV) rebates—as well as Canada's decision to
work toward a ban on ICE vehicles by 2035—are helping support
faster adoption. Canadian provinces Quebec and British Columbia
both offer incentives on top of the national government program and
those provinces see above-industry BEV penetration rates.

Canada's national Incentive for Zero-Emission Vehicles (iZEV)
sees some EVs eligible for up to CA$5,000 rebate at point of sale
for a purchase or a lease of more than 12 months (though the amount
is prorated and based on the lease term). As with the US, the list
of vehicles which are eligible changes. Canada's national program
has electric range requirements (which impacts PHEV eligibility) as
well as vehicle price restrictions.

Quebec's program is more transparent and has fewer restrictions;
instead of calling it a rebate, it is called a financial assistance
program. In 2024, up to CA$7,000 can be applied to purchase or
lease of a BEV or CA$5,000 for a PHEV. It has no income
restrictions but does have pricing restrictions and is being phased
out.

Among the reasons Quebec has been aggressive on the BEV front is
that the province gets a substantial amount of its electricity from
hydropower and can support BEVs with renewable energy. In Quebec,
assistance drops in 2025 and 2026, and in 2027 is phased out
completely. In British Columbia rebates depend on the buyer's
income as well as vehicle price and type, with up to CA$4,000 for
BEV or extended-range EV and up to CA$2,000 for PHEVs. The province
of Ontario, however, has resisted offering any incentive; residents
there can only access the national plan.

Canada's national program and a national policy more
consistently supportive of BEVs contribute to BEV and PHEV
adoption. However, the provincial-level incentives seem to drive
regional adoption, with Quebec consistently accounting for most EV
registrations in Canada. Through April 2024, Quebec registrations
accounted for 50.6% of Canadian BEV registrations; British Columbia
counted for 20.6% and Ontario captured 22.5%.

Quebec and British Columbia account for more BEV registrations
than their natural registration distribution across the country. In
overall vehicle registrations, Ontario accounts for about 39% of
vehicle registrations, followed by Quebec at about 24%, Alberta at
12%, and British Columbia, which is narrowly behind Alberta at
11.6%. If BEV adoption in Canada mirrored overall vehicle
registrations, Ontario would also lead BEV registrations and be
substantially ahead of Quebec and British Columbia.

Instead, Quebec has held a leading position, followed by Ontario
and British Columbia. There is also evidence of some change here as
well, with Quebec's share of Canadian EV registrations taking a
significant jump the first four months of 2024.

However, when looking at registrations within each province, in
Ontario BEVs make up barely 5% of registrations in the province
from January through April 2024, compared with the national BEV
share at 8.5%. In British Columbia, BEVs accounted for nearly 15%
of vehicle registrations. In Quebec, BEVs accounted for 18% of
vehicle registrations. BEVs are overrepresented in Quebec, which
has the simplest BEV rebate logistically. In Alberta, there are
also no additional incentives, and BEV share there was 2.1%.

Currently, buying a BEV in British Columbia or Quebec has
potential for CA$9,000 in total incentives. The adoption of BEVs is
in Quebec is easily the strongest in Canada. And in those two
provinces, BEV share is far above the national average. In
high-volume provinces where there is no added incentive, BEV share
is lower than the national average. The provincial BEV incentive
programs are contributing to Quebec and British Columbia capturing
more BEV share than larger new-vehicle markets as well as being
well ahead of national BEV penetration.

State-level incentives have mixed impact in
US

In the US, BEV registrations are still highly concentrated in
the state of California. Like Quebec, California over indexes in
BEV registrations beyond what can be explained simply by its
state-level incentives. In the US, the states which offer
incentives also have more varied programs, which presumably creates
more variability in impact of state-level programs in the US.

California has also led with more strict vehicle emission rules
for decades, it has typically been a trend setting, early adopter
state inside and outside the auto industry as well as often being a
digital technology leader and embraced Tesla very quickly. In the
January through April period, California accounted for 34% of US
BEV registrations; the state's dominance of the BEV market is
assisted by state-level incentives. It was followed by Florida,
however, with 8% and no state-level incentives. Texas is third,
with 7% of US BEV registrations and a more modest US$2,500
incentive.

There are a total of 15 states in the US offering some level of
incentive on top of federal incentives, but BEV distribution in the
US does still generally see the highest volume states in overall
registrations also being the top BEV states. Within California
registrations, BEVs account for 21.4% of the total vehicles
registered, also far above the national-level BEV market share of
about 7%. BEVs accounted for 6.6% of total Florida vehicle
registrations, close to the national figure, while in Texas, BEVs
are at 5.2% of vehicle registrations so far in 2024.

The incentive in Texas, a more modest amount than California
offers, has not pulled the BEV share in Texas above the national
average. No other US state accounts for more than 4.5% of BEV
registrations, regardless of the size of any incentive.

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