Canada climbed four spots this year on an index ranking countries' "readiness" for a smooth transition to electric vehicles (EVs), placing ninth as the federal government intensifies efforts to promote the sector.
China topped the index of 20 nations by global accounting firm EY for 2023, followed by Norway, the United States, Sweden, the U.K., South Korea, the Netherlands, and Germany. The index ranks nations based on supply, demand, and regulatory factors for EVs.
Canada saw the biggest jump in the demand category this year, moving up six spaces, while adding one spot on the regulatory ranking, and remaining flat year-over-year in the supply category. EY ranked Canada 13th overall in 2022, and eighth in 2021.
"[The] steady rise in demand for EVs can be attributed to several factors, such as availability of high-performance EVs, rapid expansion of charging infrastructure, and the reduction of range anxiety," EY said of Canada in additional documents supporting the report.
"Increasing consumer inclination for an EV is being amplified by the simultaneous surge in fuel costs, improving charging infrastructure, and low cost of ownership," the authors added.
Ottawa is aiming for all new light-duty cars and passenger trucks sales to be zero-emission by 2035. According to Statistics Canada, zero-emissions vehicles (ZEVs) comprised 8.6 per cent of new motor vehicles registered in the first quarter of 2023, down from the two previous quarters. However, data from S&P Global Mobility show ZEV registrations rising to an all-time high of 10.5 per cent in the second quarter of this year.
In May, a General Motors (GM) executive called Ontario, Canada's largest province, a "laggard" in EV adoption, due in part to the Ontario government's elimination of a tax credit for EV purchases.
In its report, EY praises Canada for its increasing availability of renewable power, and ongoing investments in charging infrastructure. It also highlights the pair of multi-billion incentive deals between the federal and Ontario governments, and automakers Volkswagen AG (VWAGY) and Stellantis (STLA), to build battery factories in Ontario.
Last week, Prime Minister Justin Trudeau touted Canada's progress on building a supply chain for EV batteries, suggesting the country could be a top jurisdiction for the global industry.
"We are going to be leading on battery supply chains. We went from sixth in the world in battery supply chains a few years ago, to now being second in the world," he said in an interview with Bloomberg Television.
Last year, research from BloombergNEF showed Canada ranked second behind China in its analysis of the global lithium-ion battery supply chain.
"Canada's recent investment in its upstream clean energy supply and increasing demand in the U.S.-Mexico-Canada Agreement region increases the country's competitiveness," Bloomberg authors wrote in November.
The Bloomberg report also notes "large raw material resources and mining activity, as well as its good positioning in environmental, social and governance factors and infrastructure, innovation, and industry."
Trudeau boasted last Thursday that "major investors from around the world are catching on to the untapped potential of Canada."
"When the leaders of Volkswagen were asked, 'Why Canada?,' they pointed to our critical minerals supply chains. They pointed to our clean electricity grid. But mostly, they said it was the calibre of Canadian workers that sealed the deal," he said.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.