The future of transportation is electric

Policy perspective by ABB


The case for electrification is compelling, and it goes far beyond EVs.


The transition to electric vehicles (EVs) is just beginning and with automakers and other countries making significant commitments to phase out conventional internal combustion engine (ICE) vehicles, the future for EVs is bright. But electrification of transportation (e-mobility) goes well beyond passenger vehicles to include fleet vehicles (cars and trucks), mass transit buses, light rail, ships and even non-road vehicles like forklifts.

The rationale is simple: electric vehicles have lower cost of ownership than their conventionally powered peers, they emit less pollution, and they enable emerging mobility technologies and business models.

This paper outlines the benefits of transportation electrification, explains why EVs are likely to overtake internal combustion engine vehicles, and identifies targeted actions the federal government can take to support the e-mobility transition and itself realize its benefits.


E-mobility is already here

Transportation electrification is well underway. From its origins with light rail and subway systems, electrification is expanding to incorporate more transit types and applications.


Subways and light rail

Rail is one of the more prominent forms of electrified transport, as local rail and subway systems have used electric power for 100 years. Now electric rail is poised to become more economical, thanks to the development of supporting technologies.  In efforts to cut emissions to zero in Canada, Toronto has begun construction on a new light rail transit line (LRT) to be up and running by 2021. For this $8.4 billion project, ABB is on board to contribute key components for power distribution which will allow the transit line to run on nearly zero emissions. The LRT will decrease greenhouse emissions by about 29% per person, and cut 40% of the current footprint. This ground-breaking technology is virtually a maintenance-free solution that will deliver long-term sustainable transportation for the Greater Toronto Area.[i]


Transit buses

Approximately 12% of Canadians use public transit with the majority of that percentage using the bus as their main source of transportation.[ii]  Cleaner technology is currently a common occurrence in Canadian cities, but many transit vehicles continue to run on carbon-based fuels such as hybrids and diesel. Electric buses are on the rise and the next step as of April 2018, is the launch of the national Pan-Canadian Electric bus demonstration & Integration trial, led by the Canadian Urban Transit Research and Innovation Consortium (CUTRIC). This project is funded by federal and provincial governments and shared amongst, Brampton and York Region Transit in Ontario and TransLink in Vancouver, British Columbia. This trial is the kickoff to bring electric, zero-emission busses across Canada providing 18 standardized and interoperable e-buses. ABB will be contributing their 450 kW overhead electric charging systems with inverted pantograph, in attempts to make public transportation greener and more cost effective for Canadians.  This project will occur over the span of many years and phases with the start of Phase 1, valued at $40 million.[iii]  Additional new electric-drive bus lines and charging system programs are popping up around the world, and have been successful.


Electric Vehicles

While EVs are currently in the “early adopter” phase of the product lifecycle, they hold tremendous potential.  As of 2017, EV sales in Canada have increased by 68% and there are approximately 50, 000 plug-in vehicles currently on Canadian roads.[iv]  New sales records are consistently being broken each year as the idea of green transportation gains national momentum.  In conjunction with EV sales, there is a rising demand for reliant chargers that have the ability to quickly and efficiently recharge the battery, compared to current models which can take up to eight hours.  ABB’s new Campus in Montreal is home to a $90M investment, The Center of Excellence in E- Mobility, with the instillation of two 50kW Terra 53 DC electric vehicle charging stations.  Under normal road and weather condition, the chargers are capable of enabling a driving range of 60 km (37.3 miles) with 15-30 minutes of charging.[v]  ABB has also recently unveiled its installations of the 350kW DC charging stations that are currently in operation. These fast chargers are designed for highway and enroute charging to provide the highest possible uptime.  The electrification of vehicles is a crucial component to combat climate change for a more sustainable future.


Ships and Ports

Diesel-electric hybrid ships have been operating on the high seas since the 1990s, and the technology has now become the industry standard for cruise ships, LNG tankers, polar icebreakers, offshore support vessels and more.  As of 2017, ABB was awarded a contract by the Vancouver Fraser Port Authority to provide a technology solution that will enable a shore to ship power supply for Canada’s largest container port located in Delta, British Columbia.  This will allow for ships at the Global Container Terminal (GCT) to connect to the electrical grid of BC Hydro, instead of using diesel generators.  The ability to plug into the grid when berthed and shut down engines will curtail polluting substances such as nitrogen and Sulphur oxides (NOx and SOx), and will also mitigate noise and vibration levels, to support the terminal’s sustainability goals.[vi] A large cruise vessel running its auxiliary engines on diesel, to power its loads while in port, emits the equivalent amount of nitrous oxides as 10,000 cars driving from Toronto to Quebec City. ABB’s solution to power ships with electricity supplied from shore includes special substations that can cater to both 50Hz and 60Hz vessels from different parts of the world, together with on-board connections and automation panels.  This enables ships to shut down their engines and plug in to an onshore power source, without disrupting on-board services.


Why electrification is the future

The e-mobility transformation is being driven by three primary forces: cost, environmental benefits, and a view toward enabling future technologies.



Light-duty vehicles:

There are two main cost categories where electric vehicles have significant benefits: maintenance and fuel. Unlike internal combustion engines, electric drivetrains have few moving parts—about 20 compared to the typical car’s 1,500 to 2,000[vii]—and can last for decades.  Their durability, reliability, and relatively low maintenance costs have been well-tested in rail transit and the toughest of industrial applications for a century. Fuel costs are also markedly lower. The Ministry of Transportation of Ontario (MTO) estimates that the cost to power a fully electric vehicle is about $300 per year in comparison to gasoline cars which can cost between $1,000 and $2, 500 per year to run [viii]. Meanwhile, the cost of electric drive continues to decline as battery energy density increases and cost per-kWh falls.


Transit Buses:

Several municipal transit operators have conducted trials of electric buses, which provides a growing body of data to support the business case for going electric. A 2016 study by New York’s Metropolitan Transit Authority and Columbia University found that, while electric buses presently cost about $300,000 more than the diesel alternative, “annual [operating cost] savings are estimated at $39,000 per year over the 12-year lifetime of the bus.” The result is a reduction in total cost of ownership of more than $150,000.[ix]


Fleet vehicles:

Reduced maintenance and fuel costs make EVs particularly attractive to fleet owners who have very high vehicle utilization rates. For example, autonomous vehicles (AVs) in rideshare applications are projected to be on the road 40% of the time[x], racking up over 11,000 km per year. Whether it’s local delivery, field service vehicles, ridesharing or other businesses, all fleets face cost pressures, making EVs particularly attractive.

Underscoring these cost benefits, electricity prices have been historically flat for decades, while gasoline prices have been very volatile. Electrification of fleets represents a lower risk and more predictable business model where profitability is not subject to the whims of highly uncertain fuel costs.


Environmental impact

Air quality:

Air quality is a national but also highly localized concern. The majority of Canadian cities are well above national standards ranking as one of the top countries with the highest quality of air.  Problems arise in specific locations such as urban cities where air pollution is primarily caused by transportation emissions.  Health Canada used a computer model that shows the associations between air pollution and health effects. The model and many health organizations, both in Canada and internationally, all conclude that air pollution has significant impacts on human health.[xi]

If an effort to reduce/eliminate emissions by utilizing electric vehicles, health would drastically improve worldwide, as well as being a more sustainable option for the planet.


Reducing Canadian greenhouse gas emissions:

The transportation sector accounts for over 23% of Canadian greenhouse gas emissions (GHG)[xii]. Canada’s GHG emissions currently represent about 1.6 percent of the global total and is among the top 10 global emitters.  The federal governments have committed to reduce annual GHG emissions from the current level of 726 megatonnes (Mt) to 622 Mt in 2020 and 525 Mt in 2030.[xiii]  Electrification is the key tool for de-carbonizing transportation. Further, the fuel efficiency and environmental performance of even the most fuel efficient conventional vehicle on the market will steadily decline over its lifetime, even with regular maintenance. EVs, on the other hand, get cleaner over time as the power supply behind them becomes more sustainable and less carbon-intensive, a pathway which is well-underway.


Future technology enabler

Autonomous vehicles have captured the public imagination as the technology for driverless cars continues to evolve. Nearly all of the manufacturers developing AVs have opted to use electric vehicles as the platform, and for good reason. First, EVs are mostly “drive-by-wire,” which are easier than mechanical linkages for computers to control. Their large batteries also make EVs capable of supporting the power-hungry sensors and control systems needed for autonomous driving. Second, fuel economy and emissions requirements will only increase over time and EVs essentially take those issues off the table. Still, the bottom line is cost and as noted earlier, electric cars boast lower operating costs and lower TCO. This is particularly important for fleet operators whose vehicles will spend every minute they can on the road. In the case of ridesharing, the evolution toward autonomous vehicles will create a use case that demands the lower cost profile and higher reliability that EVs offer.


Challenges facing e-mobility, and their solutions

The obstacles to wider adoption of electrified transport are challenging, but they are also addressable. Below we discuss three broad challenges that touch all modes of e-mobility and the solutions that are available to meet them.


Technology & government leadership

From both a policy and market standpoint, the world is already on its way to converting to electric mobility, but while much of the technology is already here, the US lags other countries in deployment. China is “all-in” on electrification to the point where that country has become the driving force in consumer EV sales. Sales of EVs in China are roughly equivalent to those in all other countries combined, and the majority of that demand is being met with domestic product. The Canadian must work harder to provide the private sector the certainty needed for investments in e-mobility solutions and also to encourage the deployment of e-mobility technologies, like electric transit buses and fleets, port electrification, and charging infrastructure. If we do not, we will be left to import those technologies from nations that do, and for the foreseeable future, that means China.


Infrastructure deployment

The primary infrastructure challenge for e-mobility lies in vehicle charging times and charging station availability. DC fast chargers already offer the ability to provide a full charge in 45-60 minutes and up to 200 km of driving in as little as 8 minutes. However, support for further research, development, testing and deployment of fast charging technologies needed and is an example of where government could make an impact. More deployed charging infrastructure is needed to allow consumers to “re-fuel” during long road trips, just like they can with gas-powered vehicles. The federal government is in a good position to assist and enable the deployment of sufficient EV charging infrastructure, particularly DC fast chargers.



Charger connections for consumer EVs have coalesced around one connection standard for AC charging (J1772) and two others for DC fast charging (CCS and CHAdeMO). For other segments of the market such as electric buses and other medium or heavy-duty vehicles, the charging systems currently on the market present a myriad of solutions, some open and some proprietary. The industry is working to address this, but as with any standards-making process it will take time.


Electric grid- Vehicle-to-grid concept

The power grid represents the foundation for a ubiquitous “refueling” infrastructure for e-mobility, and it is capable of supporting many more vehicles than it currently does.  British Columbia, Quebec and Ontario are the three Canadian provinces with the highest number of Electric Vehicles, Ontario being the only one with time-of-use electricity rates.  Since 2007, the ability of the power grids for EV’s have been looked at. A study done by the University of Victoria’s Pacific Institute for Climate Solutions established that even with a high electricity demand, B.C has the unused capacity on its grid to charge almost all the 2.8 registered vehicles in the province. Hydro- Québec also calculated that it could incorporate a million EV’s into the system without having to make any big changes to the infrastructure.[xiv]  The problems begin to arise if all demand is localized to one area and not spread throughout the entirety of the grid system.  Homes aren’t designed for the type of load EV’s would put on them, and heavily populated areas such as downtown Toronto already has trouble meeting the electricity demand due to old transformers with small capacities.

Importantly, EVs provide opportunities to lower the overall cost of operating the grid. For example, EVs could help ease the ramp-down of solar generation in the evening hours by delaying the start of their charging cycle or even sending power from its battery onto the local grid. This would allow grid operators to manage high penetrations of solar power without investing in new generation assets. EVs can also provide a range of other services to support the grid.


Policy prescriptions and opportunities

Ensuring Canada’s competitiveness in e-mobility will take competency and leadership. There are a number of things the federal government can do to ensure that Canada is not left behind in the global e-mobility transition.


Supporting e-mobility projects

Natural Resources Canada with a budget of $16.4M for phase 1 in 2016 and $80M in 2017 for phase 2, funded by the government of Canada.  With the completion of the first phase, phase 2 will be completed over four years and allow for the government to focus on the coast-to-coast network of electric vehicle fast chargers on the national highway system.



The federal government can use its exceptional buying power for its many fleet vehicles to drive growth in both electric vehicles and charging infrastructure.  Increased government use of electric vehicles will save the taxpayer significant fleet maintenance and operation costs.


Tax Incentives

In provinces of British Columbia, Ontario and Québec, the Federal government of offering rebates, subsidies and promotions for the ownership of an Electric Vehicle and the purchase of a charging station.[xv]  Through the Clean Energy Vehicle Program, the Government of British Columbia offers a rebate of up to $5,000 for the purchase of an electric vehicle and $2,500 for the purchase of a rechargeable hybrid vehicle.  Additionally, in B.C., the SCRAP-IT Program offers a rebate of up to $6,000 when you scrap an old gas-fueled vehicle scrapped and replace it with a new or used electric vehicle.

In Ontario as of March 2018, EHVIP (Electric Vehicle Incentive Program) provides the following incentives for battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) with a retail price less than $75,000.  It offers $3,000 to $10,000 based on the EV’s all-electric range, plus $2,000 to $7,000 based on the EV’s seating capacity, and Up to a maximum of $14,000 per eligible EV.

In collaboration with The Drive Electric Program, the Quebec government offers a rebate of up to $8,000 when you buy or lease a new electric vehicle. The discount is available to individuals, businesses, organizations and municipalities.  Quebec is also in the process of trying to pass Bill 104, which is an act to reduce greenhouse gases by increasing the number of zero-emission vehicles by 2025.  Bill 104 strives for a minimum quota for car dealers in Quebec to have 15.5% of all car sales, electric vehicles.[xvi]

To further advancement, government could also expand incentives for electrifying non-road vehicles like forklifts, tractors, and all-terrain vehicles.


Technology development

Despite its high visibility and growing deployments, e-mobility is still an emerging technology. The government should invest in early stage research and development to augment industry R&D programs in related technologies such as batteries, smart charging and vehicle-to-grid systems that aggregate EVs as a single resource. Additional work is needed to bring utilities, manufacturers and energy market participants together in order to remove technical barriers to commercialization. With the right level of leadership by government, Canada can secure its position as a global leader in electric transportation technology and expertise.