More chargers, less red tape: How to speed up electrifying Ontario’s MHDVs

At a glance

Helping Fleets Charge: Barriers and solutions to charging electric medium- and heavy-duty vehicles in Ontario, by Chandan Bhardwa. Pembina Institute, November 2024.

This report from the Pembina Institute, a Canadian think tank, examines how building charging infrastructure for medium- and heavy-duty vehicles (MHDV) in Ontario could help electrify road-freight transport, which is central to economic growth and trade but also responsible for half of on-road emissions. The report says the average daily driving distance, combined with declining battery costs, shows that electrifying fleets in Ontario is feasible. This would reduce fuel and maintenance costs, support Canada’s critical minerals industry and create thousands of jobs in the MHDV manufacturing industry.

Getting there will require the timely deployment of charging infrastructure, but there are barriers in the way. The report says these include: high charger costs, lack of awareness among fleet operators, unfavourable electricity rates, regulatory complexity, inconsistent equipment standards and insufficient grid readiness. Overcoming these obstacles is key to achieving Canada’s targets of 35 per cent zero-emission MHDV sales by 2030 and 100 per cent by 2040. Using Ontario as a case study, report author Chandan Bhardwaj, a senior analyst at the Pembina Institute, shows how Canada could adopt cleaner transport, reduce emissions, enhance public health and stimulate economic growth in clean technology industries.

Key findings

• Disproportionate emissions: Despite representing only 10 per cent of vehicles, MHDVs account for 50 per cent of Canada’s on-road emissions.
• Feasibility: 95 per cent of medium-duty vehicles (MDVs) drive an average of 160 km per day, which is within the typical range of available electric MHDVs. Combined with lowering costs, the report suggests 40 per cent of existing MDVs in Ontario could be electrifiable by 2027.
• Low adoption rates in Ontario: Only one per cent of Ontario fleet operators have EVs, below the Canadian average of 5 per cent.
• Not enough for future needs: Ontario has just 1,500 high-powered Level 3 chargers out of 9,650 total ports. It requires at least 8,000 to 10,000 by 2030 to meet federal zero-emission targets.
• High installation costs: Installing high-powered chargers can cost up to $1 million. This is prohibitive for small fleets, as 90 per cent of Canadian trucking fleets operate fewer than 10 vehicles.
• Unfavourable electricity rates: Current electricity delivery rates make operating public charging stations uneconomical due to low utilization rates. This is particularly true during peak demand charges.
• Grid upgrades needed: The Independent Electricity System Operator estimates that grid capacity will need to more than double by 2050 to support the anticipated growth in EV adoption.

Bigger picture

Transport is one of the highest-emitting economic sectors, accounting for up to 40 per cent of all emissions in some Canadian jurisdictions. Heavy-duty vehicle manufacturing, dominated by internal combustion engine vehicles, has shrunk over the past decade to one-tenth size it was in 2012. The author argues electrifying MHDVs would significantly reduce emissions, lower fuel and maintenance costs, boost Canada’s mining industry due to higher demand for critical minerals needed for EV batteries and create thousands of jobs. 

The author argues there is huge potential for electric MHDVs, but only five per cent of fleet operators across Canada have EVs. In Ontario, which the report examines as a case study, it is just one per cent. The report cites the slow deployment of charging infrastructure — especially high-powered charging ports — as the primary reason for this low uptake in Canada. Since 90 per cent of Canadian trucking fleets have fewer than 10 vehicles, putting private chargers out of reach, the report calls for public charging infrastructure.

The report outlines how diverse electricity systems, complex regulations and limited public awareness in Ontario make scaling EV infrastructure challenging. It calls for collaborative efforts among governments, utilities and private operators. To help overcome high electricity rates and inadequate grid infrastructure, the report recommends exploring innovative solutions like demand management and resilient grid investments. These solutions apply to many other aspects of the energy transition beyond MHDVs, including the need to integrate intermittent renewable energy generation with national grids.

Challenges and opportunities

Key barriers to energy transition progress identified in the report:

• High costs: The upfront costs of installing high-powered Level 3 chargers are prohibitive for small and medium fleets who form the majority of Canadian operators.
• Complex regulatory frameworks: Approval processes for charging station installations involve multiple agencies, leading to inconsistent standards and lengthy delays.
• Lack of awareness: Many fleet operators are unfamiliar with the benefits and requirements of electric MHDVs and charging infrastructure.
• Unfavourable electricity pricing structures: High peak demand charges undermine the financial viability of public charging stations. Combined with low utilization rates, this weakens their business case. 
• Limited grid capacity and readiness: Ontario’s electricity grid requires significant upgrades to handle increased demand from electric MHDVs. Utilities are often not considering the rapid changes needed for the future surge in EV deployment due to outdated planning codes.
• Inconsistent charging standards: The absence of uniform charging equipment standards creates interoperability challenges. It deters investment and long-term planning by fleet operators.

To address these challenges, the report recommends:

• Lowering costs through public funding and incentives: Extending the community stream of Ontario’s EV ChargeON program, which funded the installation of public charging stations outside major cities, could lift barriers for small operators and incentivize private investment in underserved areas.
• Streamlining regulatory processes: Implementing a single-window approval system for charging infrastructure could reduce delays.
• Redesigning electricity pricing models: Restructuring demand charges for public charging operators could enhance the business case for deployment. Utilities could explore time-of-use pricing tailored for MHDV fleets.
• Promoting awareness: Expanding fleet advisory services could provide training on total cost of ownership and funding opportunities for transitioning to electric vehicles.
• Enhancing grid investment planning: Utilities should adopt forward-looking planning practices based on projected EV adoption. They should update capacity codes and collaborate with governments to co-fund necessary upgrades.
• Equipment standards: Establishing universal charging protocols enforced through national regulations would improve interoperability. Canada should align its standards with those of the U.S..
• Supporting innovation: Invest in new technologies like vehicle-to-grid systems in which electric MHDVs feed electricity back to the grid from their batteries during idle periods, generating revenue. Pilot projects in high-demand areas can demonstrate scalability and effectiveness in helping manage peak grid demand. 

In their own words

High costs of purchasing and installing chargers remain the single largest roadblock for smaller operators, with charger installation costs ranging from $65,000 to $1 million.

Helping Fleets Charge: Barriers and solutions to charging electric medium- and heavy-duty vehicles in Ontario, by Chandan Bhardwa, Pembina Institute, November 2024.

Final thoughts

The report shows how expanding charging infrastructure for MHDVs is key to decarbonizing the road-freight sector. This is important for Canada but also a key element to achieving net-zero emissions globally. The Pembina Institute identifies policies and investments needed to ensure EV charging infrastructure deployment keeps pace with ambitious climate targets, which are relevant to other clean energy sectors.

Exploring grid modernization and alternative charging technologies and approaches, such as electric roads that charge EVs as they drive would enhance the report. Given the ubiquitous challenge worldwide of electrifying road transport, Ontario’s experience provides valuable lessons. The report also sheds light on the complexities of navigating complicated regulations, fostering collaboration between diverse groups and balancing economic growth and environmental sustainability. These are obstacles familiar to many across the energy transition, from expanding grid interconnection to building green hydrogen infrastructure.

Download the full report originally published by the Pembina Institute on Nov. 12, 2024.