Expect “pent-up demand” to buy electric cars in the next few years: BC Hydro

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

A new report from BC Hydro suggests that about a third of drivers in British Columbia were considering purchasing an electric vehicle before COVID-19, but according to a mid-May survey, 85% delayed their decision to buy.

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

Drivers who want to buy an electric vehicle are primarily motivated by the desire to abandon their budget for the rising price of gasoline and for environmental reasons. The secondary factors for wanting an electric vehicle are the reduced maintenance costs due to the reduced number of moving parts compared to gasoline vehicles and new technological features.

BC Hydro analysts predict 2021 could be another record 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 British Columbia residents reported driving to work or school before the pandemic, but that number is expected to rise by about 15% when things return to normal.

But even if demand is expected to be considerably higher, there will be a cap 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 of electric vehicles, as well as touch screens on the driver’s dashboard and in the backs of passenger seats. This chip shortage happened because automotive demand fell during the pandemic and suppliers did not stock enough chips for the possible rebound in demand, which is happening now.

In addition, there is a growing shortage of lithium-ion batteries, which are used in smart phones, laptops and electric vehicles. There aren’t enough batteries for electric vehicle makers to ramp up production, and the United States depends almost entirely on Asia for battery production and the raw materials needed to manufacture them.

There could be a serious lithium supply shortfall in 2027 as mining capacity stagnates as the electric vehicle boom continues. The battery supply deficit is expected to delay the production equivalent of around 3.3 million electric vehicles with 75 kWh in 2027, nine million in 2028 and more than 20 million in 2030.

The BC Hydro survey found that 60% would buy an electric vehicle if they could get one sooner.

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