North America has been the strong car market since the automobile was introduced to the public. Symbol of wealth, status and freedom in Canada might be going strong but as the statistics show, buying a brand new vehicle could become harder to afford these days.
2022, the year of hope and expectation, leaving 2 years of hardship behind, year of the new beginning. But, the expectations came somewhat short after the final results came out. It’s been a long time since Canada saw such a low level of new vehicle sales.
According to DesRosiers Automotive Consultants, 1.49 million units sold in 2022 marked the first time since 2009 that the final number fell short of 1.5 million.
Despite promising signs to begin the year, overall sales were down 9% from the previous year. The seasonally adjusted annual rate for vehicle sales in January was 1.67 million. However, “things deteriorated rapidly,” according to DesRosiers’ analysis.
That means that new vehicle sale in Canada sunk to a 13 year low in 2022!
Ford is Still on the Throne in Canada
With 240,325 units sold, Ford continued to be the best-selling brand in Canada for the 14th year in a row despite a 1.3 percent decline, and the F-150 was the best-selling car overall for the 13th consecutive year.
With 228,003 (+5%) and 200,204 (-11%) units, respectively, General Motors and Toyota complete the top three.
Availability doesn’t mean more sales for EV
Despite the fact that more people than ever are preferring to drive electric vehicles, the transition to them appears to be more challenging in Canada than in other affluent nations. The ratio has increased from one EV for 20 vehicles a year ago to around one EV for every fourteen new vehicles purchased in the first half of 2022.
There are presently 80 battery-electric vehicles available for purchase in Canada, according to the Canadian Automobile Association, and they cost an average of $82,000 CDN. A $5,000 Government subsidy is available to EV customers, however in order to be eligible, a car’s base price must be no more than $55,000.
In other words, EV is preferred but, the $5000 rebate will be hard to acquire taking in account the average price of EV in Canada.
In order to restrict the sale of fossil fuel vehicle after 2035, Canada plans to have 480,000 completely electric passenger vehicles, or 60 percent, of all vehicles sold in the country by the year 2030. A very motivated move despite meagre incentives!
Will Canada follow Germanys footsteps?
Two months ago, the European Parliament approved a 2035 ban on the sale of new gasoline and diesel vehicles. Well, that decision did not sit well with car manufacturers at all!
On Friday, the European Union postponed a decision to outlaw the sale of new gasoline and diesel vehicles beginning in 2035 after Germany made a last-minute push to encourage the use of synthetic fuels.
While policy makers push for legislations prohibiting fossil fuel vehicles, the reality is much different and car manufacturers know that. Mining Lithium is not as cheap and not as environmentally friendly a previously thought. The harsh reality keeps EV prices high and it makes EV unaffordable for many Canadian consumers.
But what is the alternative to Canadians?
As the 2022 car sale numbers show, Canadians are hesitant to buy new cars. On one hand we have the rising prices of gasoline and the rise of fossil fuel vehicle prices, on the other hand Electric Vehicles are still priced too high for majority! EV remains to be a boutique product for minority who can afford initial high cost of buying $82000 averaged cars.
It appears to be a pat position for many!
If Canada wants to increase the sale of EV’s, perhaps the initial cost of buying must be reduced or the Government grant needs to be higher! Just wondering who’s paying for Governments grant?
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