Innovative Electric carsand their implicationsfor Canada’s economy

Innovative Electric carsand their implicationsfor Canada’s economy




Thefactthattheelectriccar are thenextbigrevolutionaryinnovation of the twenty-first century is an understatement. Dimitropoulos, et al., (2013) observesthat, with the global fuelcosts skyrocketing on a dailybasis, coupled with theeverunstable Middle East region, innovators have, and will be forced to come up with innovative ways to power up automobiles. With such a major innovative step, massiveeconomicshifts can be expected in majoreconomies. Canada is noexception. Thismanuscriptthusoffers a succinctanalysis of theimplications of the innovative car in Canada’s economy. Inferences are drawn from majorbusinessandinnovationjournalsand websites whilemakingdeductions on theplausibleeffects on Canada’s economy. Whereastheinnovation of electriccarswaspioneered in the 20th century, it has not been until recentlythatmajor innovative changes to priorprototypeshavebeenconsidered. The underlying thesisstatement in thismanuscript is thatelectriccarsoffereconomicaland eco-friendly alternativescompared to fuel powered automobiles.
In order togaininsights into the technology andinnovation of theelectriccarand its relevanceand uptake in Canada’s economy, understanding its briefhistory will come in handy. An electriccar is referencemade to automobiles that are powered by either one ormoreelectricmotorsaccording g to Bradley and Quinn (2010), by theuse of electrical energy which is kept in rechargeable batteriesor alternative energystoragedevices.Suchcarshavebeen documented (Brownstone, et al., 2000) to havesuperiortorque than fuel powered carshence their acceleration is smoother andstronger. Additionally, Hydro, et al., (2013) documents that theyhave a threefold superioradvantagecompared to fuelconsumingcars.
Contrary to popularbelief, theforemostelectriccarswereproduced in the 19th century. Theseprototypeswherethepreferredautomobilesoptions since discoveries on internalcombustionengineswere not yetavailable. According to Hidrue, et al., (2011), themassproduction of inexpensivegasolineautomobilesandadvancements in related technology led to thedecline of electriccars up until the 1970s. Theenergycrisis of thistimenecessitatedthe redevelopment of theelectriccar, althoughtheinterestwasshort-lived as thecarsdid not seethelight of mass production.
However, a renewedinterest in electriccars has been one of the 21st’century’s hallmarks. Since 2008, groundbreakinginnovationshavebeenpioneered, moresodue to technological advancement in batterylifeandthemanagement of energy. Additionally, as earlierindicated, current global concerns over oilpricesandtensions in the Middle East (the OPEC leaders) has necessitatedinnovations on electriccars.
Notonly are ecologicalbenefits of electriccarsnoteworthy, (due to their zero greenhousegasemission), the overall performance of thesecars is outstandingcompared to gasoline powered cars (Bradley and Quinn, 2010).Assuch, variousgovernments, (includingthe Canadian government), haveintroducedtaxcreditsandreductions, subsidizations, andnumerousotherincentivesin order toencouragethemass uptake andintroduction of electriccars.
Documented statistics (Green Energy Coalition, 2001) revealsthat Canadians paylessforelectricityconsumption. Other than China, Canada is thesecondbiggestproducer of hydroelectricity. In 2007 forinstance, hydroelectricityaccountedformore than 60% of thegeneratedelectricity in Canada. In terms of nuclear-generated electricpower, Canada lies in sixth globally with an estimated 98 billion kWh producedlastyear -2014. Therefore, the uptake of electriccars has witnessed an upwardtrend. In 1969, a paltry 0.11% of electriccarsaccountedforthetotalvolume of newcars in Canada. Thisfigure has howeverbeen on an upwardtrend with 3,200 electriccars in 2013 beingpurchased, 2,800 and 9,600 electriccarsbeingpurchased in Canada in 2013 and 2014 respectively (Natural Resources Canada, 2010). Additionally, thelocalproduction of electriccars has increasedtremendously, with 90% of alllocallyusedcarsbeinglocallyproduced in manufacturingplants in Quebec, British Columbia, and Ontario.
With suchglaring statistics, thebenefitsandimplications of increased uptake of this innovative mode of transport to Canada’s economy are remarkable. To begin with, according to Ewing andSarigöllü, (2000), innovations are made to not onlysolveexistingproblems, butalso as a means of generatingrevenue in what is commonlyreferred to as innovative entrepreneurship. With Canada constitutingapproximately 40% of the globally producedelectriccars (Moriarty andHonnery, 2008), theopportunity to be among the global leaders of electriccars exporters is glaring. According to Sovacooland Hirsh (2009), the global marketpenetration of electriccars is yetlow, standing at less than ten percent in comparison to thegasolinecars. Massiveopportunitiesthusabound to tap into thismarket. Canada’s economystands to benefit from such a move with statisticalevidence from other global electriccars exporters such as Germany revealingthatit is possible to achieve profitability. Takingthelocalsales of electriccars in Canada into account, as of 2014, CityZENN, globally manufacturedelectriccars in Canada recorded profitability marginsaveraging at460 to 500 million CND.
With such an economic turnaround, theplausiblebenefits to Canada’s economy are limitless. Additionally, the Canadian government has institutedmeasures to ensurethe uptake of theelectriccar, furtherattractinglocalbenefits that come with theuse of theelectriccar. In 2011 forinstance, the Canadian governmentinstitutedincentivesfortheinstallation of electriccarschargingpoints, includingincentivesforbuyingthevehicleandthe charging equipment’s. Ontario wentfurther to issuetaxcuts of up to 9,000 dollarsforthepurchase of theelectriccars. Quebec alsoissuedtaxcuts of up to 8,000 dollarsforthepurchase of electriccars.
Additionalbenefitsfor Canadian’s economywith regard totheelectriccar is thefinancialreprieveincurred from savings over otherwisehighgasolineprices. In as much as theworld is presentlyexperiencing a fall in oilprices, thefinancialimplications are direformostcountriesincluding Canada. With supply outstripping demand, thefluctuations of theoilpriceshave ripple effects to theeffect of weakeningthe Canadian dollar among other global currencies (He, et al., 2010). A flip sideeffect of highergasolineprices is equally not welcomeforeconomies due to thehighcost of doingbusiness. With suchinferences, reliance on electricity in its variousforms will be theorder of thedayin thenearfuture. Theuse of electriccars will thusconstitutethesecondmostconsumer of electricity, after manufacturingindustries. With Canada’s lowelectricityprices, overreliance on electriccars will thussavethecountry millions of dollarsspent on imports of crudeoil.
Otheradditionalbenefitsaboundwith regard toelectriccars uptake in Canada among which are thepotentialcarboncreditbenefits. According to theboard that superintendsthe Kyoto Protocol, projects that encourage environmental friendlyinitiativesforautomobiles can nowbenefit from carboncredits (Mathew, 2015). Indeed, the Vancouver Electric car Association has notedthisneweconomicnicheand has been at theforefront of spearheadingthecampaignforelectriccar uptake. According to Mathew, (2015), carboncredits are essentialforeconomiesandmanufacturers due theeconomicbenefitsaccrued to them. Forinstance, $5 per metric ton is achievable as earnings in thecarbonmarket. Theadoption of the innovative electriccar can thusattractmuchmore than ecologicalbenefits to Canada’s economy.
Furthermore, Canadian statistics revealsthatgasolinecar imports as of 2015 may stood at 46 million Canadian Dollars (Natural Resources Canada, 2010). Thisvaluerepresented a 6% increase from thecar exports in 2014. With suchastronomical statistics, embracingthe innovative EV (Electric Vehicles) can go a longway in mitigatingthe import costsforcars as AxsenandKurani, (2013,a) opines. With a recorded 9% uptake in electriccars in Canada in 2015, suchprospects are not farfetchedandeconomicreprieves will soon be documented.
In as much as variouseconomicbenefits to Canada’s economyhavebeendiscoursed in thispaper, variousproblemsalsoaboundwith regard tothe innovative electriccars. First, just like anyotherinnovativeproduct, initialcosts are oftenhigh. Michael, (2015) observesthatthehighinitialcosts of innovative products are in placeso as to recoupthehighresearchanddevelopmentcosts that go into innovative products. Assuch, electriccars are noexception. As Tate andSavagian, (2009) documents, theinitialhighcost of electriccars is themajorturn off andreasonforrecordedlow uptakes. However, just like thegasolinecars that facedskepticismwhentheywerefirstreleased, the uptake of electriccars is highlyanticipated in thecomingdays. Policies are alsobeingputin place to favoruptake of electriccars in variousjurisdictions, including Canada due to thebenefits that come with this technology. Suchpoliciesreducethefinancialburden of buyers through subsidiesandtaxcuts.
An additionalproblem with electriccars is thelack of appropriateinfrastructure to supporttheuse of thecars. Thisproblem is fueled by therelativelylow uptake of thecars as Green, et al., (2014) observes. Mitigations against theproblem are however in place with effortssuch as formulatingpolicies that allowforthedevelopment of infrastructure that allowelectriccars to operatebeing in place. Finally, a majorsetbackforelectriccars is thechallenge of providingsustained technological improvements. Being an innovative product, challengessuch as batterylife of theelectriccars among otherchallenges are present. Such associated challenges canhoweverbe solved by increasingresearchanddevelopmentfunds (R&D) to fundresearchactivities that focus on electriccars. Thefederalgovernment of Canada aims to have 500,000 electriccars on Canadian roads by 2018. Such a boldmovehowever, requiresmassivesupportfrom all stakeholders, includingthebiggest stakeholder- the Government, in ensuringthesuccess of electriccars.
It is alsoimportant to addressthemaintargetmarket of theelectriccars in Canada iftheprogram has to be successful. Thistargetmarketconstitutesthepeoplewho will make up theconsumers of theelectriccars. In thisregard, andalsodue to therelativelyhighcost, adultmaleandfemalesconstitutesthelargestconsumers of electriccars. Like thegasoline powered vehicles that havemen as thelargestbuyers, sales by Canadian electriccarmanufacturerCityZENNrevealsthatmenalsoconstitutesthelargestconsumers of electriccars. Thereasons as to whymen are thelargestrecipientsremain a puzzleand is a subjectforfutureresearchwork. AxsenandKurani, (2013,b) howeverobservesthatmen’s inquisitivenature may be thereason as to whytheyhave a higherresponse than women on innovative products.
Sufficeit to say, thesale of electriccars in Canada needs to have a markettargetin orderfor profitability to be realized. In thisregard, variousmodels of electriccars are in existenceandhencethemarket may havevariedpreferences. Among thevariouselectriccarsmodels are thebatteryelectricmodels, internationalcombustionengine, flex fuel, fuelcell, hybridelectric, plug-in hybrid, directinject diesel and turbo gasolinedirectinjectionmodel. Thetargetmarketforelectriccars- bothadultmaleandfemales, may thusshowvariedpreferences to theelectriccarsmodels, andthisfact must be accountedfor. Particularcarpreferencesthusneed to be notedin order to segment thetargetmarketprecisely. With evidencesuggestinghighermaleliking to theelectriccars, thisinnovationneeds to be tailored to suitthemenfolk to a certaindegree, especially in Canada.
Conclusively, thismanuscript has looked into thehistory of electriccars, its adventandinnovation in the 21 century, thebenefitsit can bring to the Canadian economy, theproblemsthat come with theinnovationandfinally, thegroup which theinnovation can be bestsuitablefor.Therefore, in as much as somechallengesabound with regard to theelectriccar, thebenefitsfaroutweighs them all, and as such, it should be considered as thenestrevolutionaryproduct of the 21st century.


Axsen, J., &Kurani, K. S. (2013,a). Connecting plug-in vehicles with green electricity through   consumer demand. Environmental Research Letters, 8(1), 014045.

Axsen, J., &Kurani, K. S. (2013,b). Do Plug-in Vehicle Buyers Want Green Electricity? A         Survey of US New Car Buyers. In Transportation Research Board 92nd Annual Meeting       (No. 13-2301).

Bradley, T. H., & Quinn, C. W. (2010). Analysis of plug-in hybrid electric vehicle utility factors.          Journal of Power Sources, 195(16), 5399-5408.

Brownstone, D., Bunch, D. S., & Train, K. (2000). Joint mixed logit models of stated and         revealed preferences for alternative-fuel vehicles. Transportation Research Part B:        Methodological, 34(5), 315-338.

Dimitropoulos, A., Rietveld, P., & Van Ommeren, J. N. (2013). Consumer valuation of changes            in driving range: A meta-analysis. Transportation Research Part A: Policy and Practice,      55, 27-45.

Ewing, G., &Sarigöllü, E. (2000). Assessing consumer preferences for clean-fuel vehicles: A      discrete choice experiment. Journal of Public Policy & Marketing, 19(1), 106-118.

Green Energy Coalition, Sierra Club of Canada., Greenpeace Foundation., Energy Action         Council of Toronto., & Toronto Environmental Alliance. (2001). Green report card on electricity restructuring in Ontario. Place of publication not identified: publisher not       identified.

Green, E. H., Skerlos, S. J., &Winebrake, J. J. (2014). Increasing electric vehicle policy   efficiency and effectiveness by reducing mainstream market bias. Energy Policy, 65, 562-         566.

He, Y., Wang, S., & Lai, K. K. (2010). Global economic activity and crude oil prices: A            cointegration analysis. Energy Economics, 32(4), 868-876.

Hidrue, M.K., Parsons, G.R., Kempton, W., Gardner, M.P., 2011. Willingness to pay for electric          Vehicles and their attributes. Resource and Energy Economics 33, 686-705.

Hydro, B. C., Axsen, J., Bailey, H. J., &Kamiya, G. (2013). The Canadian Plug-in Electric                    Vehicle Survey (CPEVS 2013): Anticipating Purchase, Use, and Grid Interactions in       British Columbia.

Mathew, C,. 2015. Carbon Credits Give $664 Benefits Per Ton, Imperial Says, Retrieved from     per-ton-imperial-study-shows. On 23rd July 2015.

Michael, B., 2015. Plugged in: Electric vehicles coming to Canada in 2015. Retrieved from:        vehicles-coming-to-canada-in-2015/article20592549/ on 23rd July 2015.

Moriarty, P., &Honnery, D. (2008). The prospects for global green car mobility. Journal of         Cleaner Production, 16(16), 1717-1726.

Natural Resources Canada, 2010. Electric Vehicle Technology Roadmap for Canada: A Strategic         Vision for Highway-Capable Battery-Electric, Plug-in and Other Hybrid-Electric     Vehicles.

Sovacool, B. K., & Hirsh, R. F. (2009). Beyond batteries: An examination of the benefits and   barriers to plug-in hybrid electric vehicles (PHEVs) and a vehicle-to-grid (V2G)        transition. Energy Policy, 37(3), 1095-1103.

Tate, E. D., &Savagian, P. J. (2009). The CO 2 Benefits of Electrification E-REVs, PHEVs and Charging Scenarios (No. 2009-01-1311). SAE Technical Paper.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: