With several automotive manufacturers pledging to significantly expand their electric fleet, the move towards electrification is ramping up. Major car companies and big retailers in Canada are looking to electric as a commitment to green technology and taking an energy efficient approach to logistics, respectively.
Major car companies commit to electric
Volkswagen announced in 2017 that it would invest $84 billion in electric vehicle development with approximately $60 billion of the total going to battery production. The auto giant also plans to offer electric and hybrid versions of 300 vehicles by 2030.
Volvo announced that all new cars will be partially or completely battery-powered, putting an end to vehicles that only have an internal combustion engine, starting in 2019. Meanwhile, other companies in the category have made headlines for investment into the development of all-electric vehicles and related technologies. With the trajectory pointing toward electrification, this trend is crossing into other areas such as commercial transportation.
Electric vehicle tech migrating into commercial transport
Tesla specializes in electric car manufacturing, offering vehicles ranging from sedans to SUV’s in their lineup. The company has broadened its product range with the Tesla Semi, which it’s calling “the safest, most comfortable truck ever,” with four independent motors that provide maximum power and acceleration and require the lowest energy cost per mile. The models offered range from 475 kilometers or 800 kilometers. The company’s bold claim aligns with consumer perceptions of the brand with almost half of Canadians associating Tesla with cutting edge technology according to Mintel research on luxury cars in Canada.
Major Canadian retailers adopting electric fleet to highlight their ethos
Retailers in Canada have taken notice of this trend and are revitalizing their logistics by investing in electric commercial transport. Notable companies such as Walmart Canada have agreed to purchase 30 Tesla all-electric 18-wheeler semi-trucks as part of a plan to have all of its fleet use alternative power by 2028. The Canadian-subsidiary of the US-based retail giant made the announcement in September 2018, which adds to the existing 10 Tesla semi-trucks ordered a year prior. The most recent order coincides with Walmart Canada’s initial goal of electrifying 20 percent of its fleet by 2022.
One of Canada’s largest food retailers, Loblaw Companies Limited pre-ordered 25 Tesla Semis in November 2017, aligning with the organization’s goal to have a fully electric fleet as part of their commitment to reduce its carbon footprint by 2030.
Opportunities abound for brands to ‘electrify’ their fleet
Advancements in lithium ion battery technology are improving driving range for vehicles in the electric car arena. Other developments that are contributing greater confidence in electric and hybrid vehicles are the expansion of electric vehicle charging stations throughout Canada, a greater variety of models to choose from and government incentives. Most Canadians would consider a hybrid vehicle in the future according to Mintel research on hybrid and electric vehicles in Canada. Interest in electric vehicles will likely crossover to businesses looking to enhance their logistical channels through energy efficient and environmentally-friendly product transport.
What we think
With an increasing number of automotive manufacturers moving away from the internal combustion engine and into electric and hybrid vehicles, brands in the category will need to elevate efforts to establish a range of electric and/or hybrid vehicles in order to compete and maintain relevance in the future. Similarly, manufactures will also find opportunity in extending this strategy to include commercial transport offerings.
