Expect "pent-up demand" to buy electric cars over the coming years: BC Hydro

Tesla Supercharger station. (Shutterstock)

Wait times for electric-battery vehicle orders are expected to be even longer over the coming years due to pent-up demand from the pandemic.

A new BC Hydro report suggests about one-third of drivers in British Columbia were considering purchasing an electric vehicle prior to COVID-19, but based on a mid-May survey, 85% delayed their purchasing decision.

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Now that the light at the end of the pandemic tunnel is clearly visible, about two-thirds of survey respondents are considering purchasing an electric vehicle within five years, with the majority looking to buy one within two years.

Drivers looking to buy an electric vehicle are primarily motivated by the desire to abandon their budget for the rising cost of gas, and for environmental reasons. Secondary factors for wanting an electric vehicle are reduced maintenance costs from the fewer moving parts compared to gas-powered vehicles, and new technology features.

BC Hydro analysts are predicting 2021 could be another record-breaking year for electric vehicle sales in the province, which is already the North American leader, with electric vehicle sales accounting for about 10% of all car sales in 2020.

The increased use of private vehicles could continue after the pandemic; 55% of BC residents indicated they commuted by car to work or school before the pandemic, but this number is expected to rise by about 15% when things return to normal.

But even though demand is expected to be significantly higher, there will be a ceiling on the ability to increase supply due to production issues.

There is a global shortage of semiconductor chips, which are used to control the powertrain and battery in electric vehicles, as well as touchscreens on the driver’s dashboard and in the back of passenger seats. This chip shortage occurred because automobile demand plummeted during the pandemic, and suppliers did not stockpile enough chips for the eventual rebound in demand, which is occurring now.

As well, there is a growing shortage of lithium ion batteries, which are used in smartphones, laptops, and electric vehicles. There are not enough batteries for electric vehicle manufacturers to ramp up production, and the United States is almost entirely dependent on Asia for battery production and the raw materials required to manufacture them.

There could be a serious lithium supply deficit in 2027 as mining capacity stalls while the electric vehicle boom continues. The supply deficit in batteries is forecast to delay the production equivalent of about 3.3 million electric vehicles with 75 kWh in 2027, nine million in 2028, and over 20 million in 2030.

BC Hydro’s survey found that 60% would acquire an electric vehicle if they could get one sooner.

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