Tesla cars are loaded onto carriers at the Tesla electric car plant in Fremont, Calif. on May 13, 2020. The COVID-19 pandemic has pummelled Canada’s automobile industry but it’s the lack of supply that’s short-circuiting electric vehicle adoption across the country. THE CANADIAN PRESS/AP, Ben Margot
The COVID-19 pandemic has pummelled Canada’s automobile industry but it’s the lack of supply that’s helping to short-circuit electric vehicle adoption across the country.
Electric vehicle sales plunged along with gasoline-fuelled models in the second quarter of the year, when dealerships joined widespread lockdowns to prevent the virus’s spread. As the economy reopens, consumers are starting to return to auto showrooms — but finding an electric vehicle continues to be a problem, especially outside Quebec, British Columbia and Ontario.
A series of roadblocks are contributing to the shortfall, including battery shortages and manufacturers prioritizing shipments to China and Europe rather than North America. It’s exacerbating difficulties that already existed.
“It’s pretty challenging,” says Jeff Turner, senior research lead at Dunsky and author of a recent report for Transport Canada that found two-thirds of Canadian dealerships didn’t have any electric vehicles in stock before the virus struck.
Supply shortages are a global challenge and the distribution of vehicles isn’t even across Canada. Few EVs are available outside three provinces, making it difficult to attract new converts.
There were 3,453 electric vehicles available at Canadian dealerships in February, down 21 per cent from December 2018. Quebec led with 1,944, followed by B.C. at 692, Ontario with 536, Alberta with 164, Manitoba 36, Saskatchewan 26, Nova Scotia 22, New Brunswick 21. There were eight electric vehicles available for sale in Newfoundland and Labrador and just four in Prince Edward Island.
The disparity in part is due to a wide difference in provincial financial incentives, which are intended to help increase consumer interest. As well, some dealerships have been reluctant to add EVs because of the added costs for consumer education, battery-charging infrastructure and the loss of potential service and repair revenues.
British Columbia and Quebec’s shortage problems eased for a few months 2018 after the Ontario government cancelled its rebate program. That prompted manufacturers to move inventory to these leading EV provinces to meet the mandates of laws requiring minimum sales. (B.C. and Quebec both offer rebate programs for electric vehicles.)
“They’re focusing that inventory in those provinces where they have targets to meet and so that’s what’s certainly contributed to some of the challenges in those other provinces that have slim pickings right now for EV shoppers,” Turner said in an interview.
Even so, demand has outstripped supply in Quebec, resulting in waits that range from several months to a year. Long wait lists can be an impediment to sales, especially for drivers coming off leases, says Daniel Breton, CEO of Electric Mobility Canada.
On top of that, salespeople are showing some reluctance to push EV sales. After losing income for a few months because dealerships were closed for months early during the coronavirus, they’re not eager to make a sale that would see them wait months for payment-on-delivery commissions, Breton said.
Among manufacturers feeling pressure is Toyota, which launched its new RAV4 Prime SUV last month only in Quebec. It’s a plug-in hybrid electric vehicle (PHEV) in the popular SUV category that has an electric range of about 68 kilometres and uses gas for longer trips.
“We’re starting in Quebec because we know that’s where the highest level of demand is, but it’s rolling out across the country,” said Toyota Canada vice-president Stephen Beatty.
Some vehicles will be available in B.C. by the end of the year or early 2021 with other provinces getting the plug-in hybrid by the end of 2021. Toyota knew supply would be tight because there are waiting lists for other versions of the popular RAV4.
Predicting market dynamics is especially difficult this year because of COVID-related dealership closures and disrupted industry supply chains, said Beatty.
“You will see much improved inventories as we move into next year,” he said, adding that the company expects electrified vehicles — hybrids, plug-ins and fuel cells — will account for 40 per cent of sales in Canada by 2025, up from 20 per cent last month and 10 per cent in the last decade.
Beatty noted the global shortage of batteries, but said the industry is on the verge of a significant shift in battery chemistry.
“Manufacturers are generally throughout the supply chain being cautious about over-investing in current technology when they see new types of batteries with much higher energy density and better pricing two, three years out.”
Electric Mobility Canada is urging the federal government to boost its $5,000 financial incentive to $6,999 for SUVs and pickup trucks. It also wants to see federal incentives for people to purchase used EVs, which is offered in Quebec.
Although Ontario shed its incentive for new cars, residents are eligible for a private incentive of $1,000 from Plug’n Drive for those who buy a used EV and another $1,000 to those who also dispose of their gas vehicle, said Cara Clairman, CEO of the group. The incentive was provided for more than 500 used cars purchased since April 2019.
The political environment has also changed from a year ago when there were large marches around the world regarding climate change, making the topic front-of-mind for many consumers.
“It was a big deal. This year there is so much focus on COVID and kids going back to school; how is it going to happen, is a second wave going to hit us, so I can understand if some (people’s) heads are not into this as much as they could have been,” Electric Mobility’s Breton said.
Clairman said she expects supply issues and the current bottleneck will be corrected over the next year or so. She’d also like to see a federal mandate that would require minimum sales of electric vehicles across the country, even though automakers aren’t big fans of such a move.
Clairman added that she’s optimistic that EV sales will bounce back after falling by 50 per cent in the second quarter.
“There has been a lull but I’m optimistic it’s going to really pick up for the rest of the year.”
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
