By Runisan Natheeswaran, Staff Writer
As the ongoing war between Russia and Ukraine continues to unravel, the rest of the world continues to feel the impacts of the invasion, especially as already inflated oil prices skyrocket to new levels. In Canada, the annual inflation rate rose to 5.7% in February and gasoline prices rose 32.3%, climbing up to $1.86 per litre on March 8, as economic sanctions against Russia, one of the largest oil exporters in the world, significantly limit oil output.
With such high gas prices affecting car owners across the globe, consumers are looking into electric vehicles. According to Google Trends, web search interest in electric vehicles reached an all-time high in North America. In a recent KPMG survey, sixty-one percent of Canadians are convinced to buy an electric vehicle due to rising gas prices and oil supply issues, with 51% of participants saying that they will not purchase a gas-powered vehicle again.
Jesse Toprak, chief auto analyst at Autonomy, believes that the growing interest in electric vehicles is due to a combination of factors, stating that “It’s a direct reaction to high gas prices, and on top of that, we’re also seeing more and more electric vehicle models available to choose from for consumers…so it’s a function of I will say, mostly high gas prices, but also the availability of new electric vehicle products in the marketplace.”
Can this be the start of mass electric vehicle adoption? The answer still remains unclear. Only 6% of Canadians have ordered an electric vehicle in the past month, which is much smaller in comparison to the interest around them. Despite many exploring the costs and benefits of electric vehicles, there are still many problems that the industry must solve in order to promote mass adoption of these vehicles.
For starters, there are not many cars available for purchase. Over the past years, the auto industry has spent over 2 years trying to catch up with demand, and many of the components that are needed for electric vehicles are simply not readily available. Tesla’s CEO Elon Musk stated that the company was plagued by “chip supply short-term & cell supply long-term”, which has prevented the company from keeping up with unprecedented demand for their vehicles.
These supply issues carry over to the next major problem in electric vehicle adoption, cost. Tesla, the leading electric-car maker, raised prices across its range of vehicles by as much as $12,500 due to major inflationary pressure in materials and shipping costs. These issues continue to grow, as the war in Ukraine threatens to push electric vehicle prices even higher. Electric vehicles also demand a higher upfront cost, than gas-powered vehicles, which can deter consumers from making the switch.
Despite these overall concerns, many analysts believe that mass adoption of electric vehicles will increase significantly over the next few decades. Countries across the globe are already lobbying for ways to reduce their carbon footprint, such as the government of Canada targeting to have all cars and passenger trucks be zero-emission by 2035. While the push for electric vehicles may not happen immediately, every single gas spike will influence some consumers to make the switch.