{"id":24938,"date":"2026-02-12T14:38:50","date_gmt":"2026-02-12T14:38:50","guid":{"rendered":"https:\/\/www.rbc.com\/en\/?post_type=rbc_tl&p=24938\/canadas-cold-calculus-in-a-warming-arctic"},"modified":"2026-02-17T15:37:36","modified_gmt":"2026-02-17T15:37:36","slug":"ev-spring-comes-after-winter","status":"publish","type":"rbc_tl","link":"https:\/\/www.rbc.com\/en\/thought-leadership\/climate-action-institute\/climate-crunch\/ev-spring-comes-after-winter\/","title":{"rendered":"Climate Crunch: EV spring comes after winter"},"content":{"rendered":"\n
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\u2794 Meet Coalie, the hard-hatted American mascot<\/p>\n\n\n\n

\u2794 Ottawa\u2019s auto strategy comes with a climate-action twist<\/p>\n\n\n\n

\u2794 What should be the North Star for Canada\u2019s proposed national electricity strategy?<\/p>\n<\/div>\n<\/section>\n\n\n\n

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Hot takes<\/h2>\n\n\n\n

\u2794 Canadian companies aren\u2019t waiting for Ottawa\u2019s signal to advance the U.S.\u2019s mineral<\/strong> ambition.<\/strong> While the federal government is holding off signing any formal deals with Washington on critical minerals, Toronto-based Cyclic Materia<\/a>l<\/a> is investing a strategic US$82 million in a rare-earth recycling facility in South Carolina, after securing new funding from the Canada Growth Fund, among other investors. It\u2019s a trend: Vancouver-based Lithium Americas is building a massive project in Nevada, while Trilogy Metals is developing a copper-zinc-gold district in Alaska\u2014with the U.S. government taking the unprecedented step of buying small stakes in both recently. North America\u2019s market and geographical gravitational pull would hopefully overcome political posturing.<\/p>\n\n\n\n

\u2794 Climate Adaptation and Resilience (CA&R) could be the next frontier in climate investing.<\/strong> RBC Capital Markets\u2019 report Private Markets Innovation in Climate Adaptation and Resilience<\/a> highlights five areas where capital could make a difference: earth data, insurance solutions for businesses and society, wildfire and the grid, water, and the built environment. CA&R secured only US$65 billion in capital flows in 2023, compared to US$1.8 trillion in traditional mitigation investments such as renewables and energy storage. Climate Action Institute\u2019s Clean Tech Lead Vivan Sorab<\/strong> believes while mitigation efforts\u2019 address both current and long-term trends in emissions, their immediate impact tends to be muted; CA&R investment can potentially deliver more visible and quicker results in the form of less downtime and assets protected. The insurance costs are already mounting: 34 extreme-weather events triggered insured losses of US$1 billion or more in 2024\u2014the second-highest number on record.<\/p>\n\n\n\n

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\u2794 “Coalie,” the hard-hatted American mascot, may struggle to revive coal<\/strong> This carbon-intensive<\/a> lump is getting a makeover for the AI meme era<\/a> as the U.S. government promotes coal as vital for the economy. Despite its critics, coal saw a resurgence last year: U.S. coal-fired electricity jumped 13% year-on-year in 2025, while natural gas\u2014which is about 50% less emission-intensive than coal\u2014fell 3.6%, according to the International Energy Agency\u2019s latest electricity outlook<\/a>. However, coal\u2019s dominance is slipping elsewhere in what the IEA describes as an “uncharacteristic” shift: major consumers China and India saw a drop in coal power generation in 2025 for the first time in more than five decades. While coal is projected to remain the single largest source of global electricity through 2030, the IEA predicts declining consumption in China and the European Union. Even the U.S. is expected to see a drop in coal consumption by 2030, Coalie\u2019s charms notwithstanding.<\/p>\n<\/div>\n\n\n\n

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Photo Credit: U.S. Department of the Interior<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n\n\n\n
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EV spring comes after winter<\/h2>\n\n\n\n

– By Farhad Panahov<\/em>, Economist, RBC Climate Action Institute<\/em><\/p>\n\n\n\n

Canada\u2019s new strategy to boost EV sales has a twist: a cap of $50,000 for the total transaction value to be eligible for a subsidy. A more stringent rule\u2014to boost mass market models\u2014compared to a previous program that allowed purchases of more expensive trims.<\/p>\n\n\n\n

Average price Canadians paid last year for a new vehicle was $55,000, and nearly $70,000 for an EV. And while each $1,000 could add 11% to the EV demand, based on Canadian Climate Institute\u2019s analysis, only 13 of the 163 battery-electric models available in Canada are priced below that level, according to the Canadian Automobile Association. Another 10, priced at around $55,000, are potential candidates to be marked down to claim the subsidy.<\/p>\n\n\n\n

Meanwhile, the 49,000-quota for Chinese EVs, should add further impetus to vehicle transition. Crucially, while these vehicles are excluded from the incentive program, they could enter the market at the lower end of the price range, as models like BYD and Geely made up about a quarter of global EV sales last year, are sold for $35,000 in China\u2014roughly half of what Canadians paid for EVs in 2025.<\/p>\n\n\n\n

But North America is notoriously in love with large cars, such as trucks and SUVs, a segment where Chinese EVs might not have the same price leverage. And don\u2019t forget the 6.1% Canadian tariff that still applies on Chinese cars, plus shipping costs. Chinese EVs, facing less intense competition than at home, could also seek higher markups for their models in Canada.<\/p>\n\n\n\n

The success of the Canadian strategy could rest as much on consumer trust as it does on the final price tag. Nearly half of Canadians are still not in the EV camp based on recent poll<\/a> from Clean Energy Canada<\/a>; and only one in 10 would buy a Chinese EV with another two in the \u201cmaybe\u201d mindset.<\/p>\n\n\n\n

The previous federal program of $2.7 billion helped put about half a million EVs on Canadian roads. The fresh round of subsidies, with a lower $2.3-billion allocation, could add 840,000 new EVs, the government projects.<\/p>\n\n\n\n

\"Canada<\/figure>\n\n\n\n

The new auto strategy could help transport\u2014a stalwart sector for emission cuts over the past five years (see our Climate Action<\/a> report)\u2014deliver the following in climate action:<\/p>\n\n\n\n