EVs cheaper to run but cost must come down to drive sales: PBO

It is already more cost effective over the long term to buy an electric vehicle than a gas-powered model, but the savings must get substantially higher if Canada is to meet its EV sales targets, the parliamentary budget office concluded in a new analysis.

The PBO report published Thursday comes eight months after the federal Liberals mandated that battery-operated passenger cars must make up one-fifth of all new vehicle sales by 2026, growing each year until it hits three-fifths by 2030, and all vehicles by 2035.

The most recent statistics show that in 2023 EVs made up almost 11 per cent of new vehicle registrations, the first time that figure was over 10 per cent nationally.

The report compares the purchase price of a new vehicle, along with federal and provincial rebates for electric vehicles, and the operating and maintenance costs over eight years.

For passenger cars, the eight-year cost for an EV model in 2022 was 88 per cent of the eight-year cost of a similar gas-powered model, and for SUVs and trucks, the EV models are about 92 per cent of the cost of buying, operating and maintaining a gas-powered option.

While EVs are more expensive than gas models to buy — about six per cent more for comparable models — the operating and maintenance costs can be as much as 2.5 times less per year.

Still, the PBO says it's not enough to drive people into electric cars as fast as the governments want them to go.

The savings would need to grow by 31 per cent to hit the 2030 targets, the report said. That means if the cost of an electric car or truck is 95 per cent of buying and maintaining a gas model now, it would need to fall to about 65 per cent.

Joanna Kyriazis, director of public affairs at Clean Energy Canada, said it's clear EVs