Electric vehicles: Accelerating in BC and beyond

Recent developments, including significantly increased funding under the Specialty Use Vehicle Incentive and Commercial Vehicle Pilots Program announced January 13, 2021, are accelerating the adoption of Electric Vehicles (EVs) and their associated infrastructure in British Columbia (BC). While many provincial governments are now assisting their EV industries, government support is particularly prominent in BC, which has become a leading jurisdiction in EV innovation and technology, private sector investment, and consumer adoption. Another leading jurisdiction is Ontario, where General Motors announced on January 16, 2021 that it will invest $1 billion to transform its CAMI plant in Ingersoll to make commercial EVs.[1]

This article focuses on BC to provide a regulatory and market summary including recent developments and expected future trends.

Government Signals

For the past 10 years, the Government of BC (the "Government") has targeted the expansion of EVs as one of its primary desired mechanisms to reduce greenhouse gas emissions throughout the province. Examples of recent and ongoing policy mechanisms include the 2011 Clean Energy Vehicle Program, the 2016 Climate Leadership Plan, and the 2018 CleanBC Plan. These plans strongly encourage the expansion of zero-emission vehicles (ZEVs), which include EVs, plug-in hybrid vehicles, and vehicles powered by a hydrogen fuel cell.

The Government's efforts have intensified in recent years to include legislative and regulatory action.

Legislation

In 2019, the Government enacted the Zero-Emission Vehicles Act (ZEVA). The ZEVA requires automakers to meet escalating proportions of ZEV[2] sales over time. By 2025, 10% of annual sales must be ZEVs. By 2040, 100% of sales must be ZEVs. The ZEVA requires automakers to submit annual reports describing their ZEV sales and gives the Government the authority to issue financial penalties for non-compliance. However, the ZEVA also includes a cap and trade system, allowing ZEV credits to be traded or purchased from the Government where an automaker cannot meet its annual quota. Regulations which further define this regime came into effect on July 30, 2020.

Exemption from Potentially Onerous BCUC Regulation

The Government's efforts to expedite EV adoption and expand infrastructure have resulted in a number of government and industry questions including monopoly concerns, scope of regulatory capture, and safety. A critical question for the EV charging industry was whether charging station operators would fall under the definition of a "public utility" under the Utilities Commission Act (UCA) because they provide for the "transmission, sale, delivery or provision of electricity" to the public. Falling into this definition would subject charging station operators to regulatory oversight by the British Columbia Utilities Commission (BCUC) and a host of onerous regulatory requirements pursuant to Part 3 of the UCA. Such regulatory capture was viewed by government, industry, and the BCUC as unnecessary.

To prevent this unnecessary regulatory capture, the Government issued a Ministerial Order exempting operators from Part 3 of the UCA. Charging station operators who are not otherwise public utilities are now exempt from BCUC regulation.

Market Incentives

To further encourage consumers to go electric, the Government is currently offering a host of funding incentives relating to EVs, EV charging stations, and the retirement of gas and diesel-powered vehicles (also known as internal combustion engine or ICE Vehicles). At the time of writing, some of these include:

BC Government Incentives to Purchase an EV

Specialty Use Vehicle Incentive – This program provides a rebate of up to $100,000 to BC businesses, local and regional governments, public sector organizations and non-profit organizations who purchase medium or heavy-duty ZEVs including passenger buses, port service vehicles and heavy-duty transport trucks, as well as smaller specialty-use vehicles such as motorcycles, cargo e-bikes, and low-speed utility trucks. This incentive was formerly capped at $50,000 but was doubled on January 13, 2021.

Commercial Vehicle Pilots Program – This program provides a total of $11 million in funding to BC businesses, local and regional governments, public sector organizations, and non-profit organizations for piloting unique or large deployments of medium- and heavy-duty or very large electric vehicles (EVs), such as domestic air, marine, or rail transportation. Eligible applicants can compete to receive up to one-third of total costs in rebates for vehicles and charging or refuelling infrastructure.

Go Electric Rebate – This program provides a $3,000 point of sale rebate for consumers who purchase a new passenger EV. This can be combined with a federal $5,000 rebate for a combined rebate of $8,000 to consumers who purchase a ZEV in BC.

BC SCRAP-IT – This program offers consumers a one-time payment of up to $6,000 to consumers who retire their ICE passenger vehicle when they purchase a ZEV.

Incentives to Install EV Charging Stations

Public Charger Program – This program provides rebates between $5,000 and $80,000 for eligible entities who wish to install Direct Current Fast Charger (DCFC) stations in BC. For Indigenous communities, the rebate is between $5,000 and $130,000 for eligible applicants.

EV Ready Plan Rebate – A rebate of up to $3,000 for the creation of an EV Ready plan – a professional strategy for multi-unit buildings to make at least one parking space per residential unit EV Ready.

EV Ready Infrastructure Rebate – A rebate of up to $600 per parking space to install the electrical infrastructure required to implement an EV Ready plan, to a maximum of $80,000.

EV Charger Rebate (Combined) – A rebate of up to $3,400 per charger (regularly $1,400, increased for a limited time as of December 3, 2020) to purchase and install Level 2 networked EV chargers to implement a building's EV Ready plan, to a maximum of $14,000.

EV Charger Rebate (Standalone) – Rather than receiving the above EV charger rebate alongside the EV Ready plan rebate and EV Ready infrastructure rebate, applicants can choose to participate only in the EV charger rebate. This standalone program offers a rebate of up to $4,000 per charger (regularly $2,000, increased for a limited time as of December 3, 2020) to purchase and install Level 2 networked EV chargers at a building's residential parking spaces, to a maximum of $14,000.

These legislative and policy actions reflect a strong intention by the BC Government to continue and accelerate its support of the EV industry.

Adoption in British Columbia

Sales of EVs are rapidly growing in BC, amounting to 4% in 2018, 9% in 2019, and 9% in the first half of 2020.[3] As most automakers have multiple EV models either on the market or in development, and some have committed to fully electrifying their fleet, these numbers will likely continue to rise as a variety of models reach the consumer market (such as SUVs and trucks, where the selection of EVs currently available for consumer purchase is highly limited).

Municipal Action

Municipalities across the province have responded to the clear government direction and consumer demand for EVs. For example, a growing number of municipalities (including Vancouver, North Vancouver, West Vancouver, Richmond, New Westminster, Surrey, Burnaby, Coquitlam, Port Coquitlam, Port Moody, Squamish, and Nelson) now require all new residential developments to include basic EV charging infrastructure in every parking space in the building.[4] While the specific zoning bylaws vary by municipality, a common effort to equip all new residential developments with charging infrastructure is clear.

More municipalities across BC are expected to follow this trend as increased EV adoption brings more demand for charging stations. These market forces will create new considerations for commercial and residential developers as well as for strata corporations across the province.

Upcoming Legal Issues

The Right to Charge

A growing concern among EV adopters and would-be adopters is the ability, and infrastructure access, to charge an EV at home. Strata buildings are home for 40% of British Columbians. Strata buildings in BC cannot approve new bylaws or infrastructure expenditures without an annual general meeting in which three quarters of the owners vote in favour of the proposed resolution. The three-quarter vote can be difficult to achieve because owners who do not drive an EV are reluctant to pay for infrastructure that doesn't benefit them.

In the face of these barriers, many stakeholders have requested changes to BC legislation to create a "Right to Charge" for EV drivers. In 2019, the Union of BC Municipalities passed a resolution requesting that the Government develop Right to Charge rules such as those in place in Ontario. In Ontario, a regulation was passed under the Condominium Act which allows owners to apply to their condominium association to install EV charging stations. The condominium association cannot deny a reasonable request as long as it meets professional standards such as safety and building integrity.

The BC NDP party, in its election platform prior to the October 24, 2020 provincial election, stated that it would enact Right to Charge legislation. How such legislation might operate in BC remains to be seen.

Billing Methods for Charging Station Operators

In this early stage of the EV industry, a universal billing method has not been adopted by charging station operators. The following methods have been discussed in BC:

• Billing by electricity consumption (also known as kilowatt-hour billing);
• Fee per use (i.e., a flat rate no matter how much time is spent at the charging station);
• Subscription-based service (i.e., a fee per month);
• Time-based service (i.e., a fee per amount of time spent at the charging station); and
• Included as part of another service (e.g., as part of the parking fee in a public parking lot).

While most consumers prefer kilowatt-hour billing, this method has not yet been approved by Measurement Canada, the responsible federal body. Measurement Canada has jurisdiction over this issue pursuant to the Electricity and Gas Inspection Act and regulations, which require the federal government to approve and recertify measuring devices used to determine a fee for electricity consumption at prescribed intervals.[5]

As kilowatt-hour billing has not yet been approved, most charging station operators in BC use a time-based billing method.

Privacy and Charging Stations

Personal information collected in BC in the course of a commercial activity, such as payment information collected at charging stations, is governed by the Personal Information Protection Act. Concerns have been raised regarding the ability of charging station operators to protect sensitive consumer data disclosed during the billing process. The billing process generally requires charging stations to rely on contactless software, where the customer places either their smartphone or a personal membership card near a sensor on the charging station. The sensor transmits information such as the consumer's credit card details, the ID token of the account, or potentially, data and software housed in the vehicle itself. Often, this information is stored or managed by a third party organization rather than the charging station operator itself. If this information is not encrypted properly, it could allow cyber criminals to hack into a charging station and obtain that information after the consumer has driven away.[6]

Responding Sectors: Trades, Manufacturing, Service Providers

Electrical Trade

The growing consumer demand coupled with increased legal requirements will require new electrician and engineering labour to supply and maintain EV charging infrastructure. A market for charging station contractors will arise and a host of licensing issues will follow.

Manufacturing

The nascent stage of the charging station industry will encourage innovation in charging station technology, which will in turn require novel product manufacturing and corresponding product liability issues.

Service Providers and Operators

An influx of EV charging stations will create a market need for effective operation of the stations. This will include maintenance concerns, safety concerns (both electrical safety and consumer safety), and a host of software concerns, among others. Charging station owners may decide to use third-party operators through contractual mechanisms. Operators may face a host of yet-unknown issues given the early stage of this industry.

National and Global Trends

The EV industry is positioned for strong growth globally, as many jurisdictions view it as an attractive way to generate economic growth while also reducing greenhouse gas emissions. For example, France, the UK, Scotland, Ireland, the Netherlands, and India have implemented bans on ICE vehicles or targets for EV expansion.[7]

China is aiming for EV sales to account for 20% of new car sales by 2025 and 50% by 2035.[8] Germany, under its 2030 Climate Action Programme, aims to have between 7 and 10 million EVs registered by 2030, which would comprise approximately 15 to 21% of its current passenger vehicle market. First-time registrations and retrofitted EVs will initially pay no vehicle tax.[9]

The Province of Quebec recently announced that it will ban the sale of gas-powered cars by 2030 pursuant to its Green Economy Plan.[10] The State of California will enact a similar ban by 2035, according to a recent executive order by Governor Gavin Newsom.[11]

Takeaways

Despite evolving discussions over billing methods, energy regulation, safety, privacy, and strata issues, the growth of the EV industry will likely continue to accelerate in BC in accordance with global trends. These trends will require new economic markets to support the demand for charging station infrastructure, manufacturing, trades, and the service industry, among others. The nascent stage of the EV industry suggests that future regulatory issues are yet to emerge, and BC's leadership in the sector suggests it may encounter these issues early given that there are comparatively few jurisdictions to learn from.

We will continue to monitor and report on the developments related to this emerging sector.