Maximilien Larivière
Advisor | ing. jr, M. Ing. | Tax

Electric cars are certainly a positive addition to the world of automobiles in the current ecological and economic context: reduced greenhouse gas emissions, public health benefits, and, for the consumer, no need to fill up at the gas station.

Despite these benefits, there are still a number of obstacles to the mass use of electric cars. The most significant challenges are the limited range compared to internal combustion vehicles and the long refuelling time.

Additionally, at this time, a fully electric car costs considerably more than an internal combustion vehicle, due in particular to the high cost of an electric vehicle battery. A study by the major automobile manufacturers reveals that the following criteria must be met for an electric vehicle to directly replace an internal combustion model:

  1. Have a range of 320 km;
  2. Have a battery with a cost under $100/kWh;
  3. Refuel in under 10 minutes.

To achieve these objectives, several initiatives have been taken in recent years to provide greater refuelling flexibility and reduce the purchase price differential with an internal combustion vehicle.

The Tesla Supercharger Network and the Electric Circuit

As of mid-2017, there were only four Tesla Superchargers in Québec. Tesla plans to open ten more locations during 2018, bringing the total to about 15 across the province. Tesla also has a network of Destination Charging Partners, that is, businesses having obtained two Tesla dedicated charging stations (8 kW or 16 kW) at a low price that allow Tesla owners to refuel at these locations. Since mid-2017, 59 stations have been in operation, providing Tesla with a total of 63 refuelling locations in Québec.

The Electric Circuit has been constantly expanding since it was introduced on March 30, 2012. There are currently 961 charging stations in Québec, including eighty-one 400-volt fast-charge stations. Businesses, municipalities and institutions install charging stations on their premises at their expense, with the assistance of the Québec government, and collect the revenues.

Financial incentives to purchase an electric car

The Transportation Electrification Action Plan provides for the addition of 100,000 electric vehicles in Québec by 2020. To achieve this objective, purchase rebates of up to $7,000 have been provided and charging station installation support is offered for individuals and on the road network.

Electric vehicle charging stations

Ford recently undertook a study to resolve the issue of refuelling time. The solution is obvious: increase the power of charging stations. Their study related to 400 kW stations (eight times more powerful than current stations). There are a number of technical issues with charging stations this powerful: activating the station uses up considerable energy in the electrical network and there is an overheating problem.

A number of technologies are currently being studied, such as backup batteries in a trailer, that could be used when needed and charging the rest of the time. This could address the problem of energy consumption peaks due to high voltage charging stations.

Raymond Chabot Grant Thornton - image
Raymond Chabot Grant Thornton - image

Québec’s place in the electrical transportation industry

Québec is in the niche vehicle sector of the electrical transportation industry, that is, school (Autobus Lion) and city (Novabus) buses and work vehicles (Hydro-Québec bucket trucks and industrial assembly line vehicles). These are ideal applications for electric technology, since work cycles make it easier to recharge vehicles.

There are potentially significant financial gains for operators, given that fuel-related operating costs are so high. Consumers can be sure of one thing, while they may not plan to purchase an electric car, this technology will have an impact on their daily lives in the near future.

Despite the initiative, the general public is slow to adopt electric vehicles. The number of charging stations may be increasing, but the fact remains that refuelling takes far too much time for most people (best case scenario: 30 to 60 minutes, often much longer).

Hybrid cars for the general public?

According to many car manufacturers, plug-in hybrids will likely be the route taken at this time. They believe that a fully electric vehicle will be a hard sell to the general public, but selling plug-in hybrids will be easier. With a 40-50 km range, many such vehicles are already available from some manufacturers, who are targeting this market for the near future.

This strategy is based on extensive studies showing that, for the average North-American driver, a range of 75 km meets 75% of the needs for individual transportation. Most manufacturers are therefore opting for this compromise in order to offer a less costly solution with a smaller battery. In the Montréal region, for example, such a solution would make it possible to travel back and forth from the suburbs to the city centre on a daily basis, without using any gas, at an initial purchase price that is far more affordable than an electric vehicle with a range of a few hundred kilometres.

There are still many unanswered questions about the general public opting for fully electric cars. Would consumers be inclined to adopt this technology if the charge time were reduced and the range increased? What if it were just a matter of rethinking how we see transportation, would consumers be prepared to compromise on some things to take advantage of the many benefits of electric cars? Is the solution plug-in hybrids?

And what about you, are you prepared to use an electric vehicle as your means of transportation?

Drafted with the assistance of Pierre-Luc Lapointe, Eng., Project Manager, Innovative Vehicle Institute, Saint-Jérôme.

24 Jan 2018  |  Written by :

Mr. Larivière is an advisor at Raymond Chabot Grant Thornton. He is your expert in taxation for the...

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