Sustainability is emerging as a key consideration for consumers when it comes to choosing a brand. Research conducted by TheRoundUp found that 78% of consumers believe that sustainability is crucial and over 55% of consumers are eager to pay more for eco-friendly products. Moreover, a poll of 1000 Canadians found that 50% of adults were more likely to buy sustainable items to have a positive impact on the Earth, rather than for personal gain further proving the importance of sustainability. With environmental concerns gaining momentum and the demand for eco-friendly solutions increasing, Small and Medium Enterprises (SMEs) are looking to revamp their operations. From the revaluation, the adoption of electric vehicles (EVs) is becoming an increasingly attractive solution to many of their problems.
The True Story of Canada’s SMEs
SMEs form the backbone of Canada’s economy, as according to the Canadian Chamber of Commerce, these businesses represent up to 98% of the businesses in Canada. According to the Canadian Government, small businesses contributed to 50% of the GDP from 2016-2020, and in 2022, these businesses were responsible for almost 41% of exported goods. Yet, even though SMEs hold such importance, a large majority of businesses go under the radar. And that comes as no surprise when you note that around 100,000 small businesses were created and around 100,000 small businesses were lost in the same time period mentioned above.
However, going unnoticed isn’t the only problem that these SMEs face. The CCC reports that post-pandemic, small businesses have experienced a staggering decrease in revenue. Combining decreasing revenue with other economic problems such as increasing gasoline prices is putting the operations of many SMEs at risk. Recent research done by Forbes in March 2024 found that gas prices increased by 4.5% year-over-year. This recent surge has skyrocketed operational costs for SMEs, compelling them to seek alternative solutions.
Transforming The Future Of SMEs With Electric Vehicles
The switch to electric vehicles comes with numerous advantages for SMEs, for example lower operational costs. Electric vehicles eliminate a small business’ dependence on gas which in turn, shields them from the volatility of gas prices. According to an estimate reported by the Canadian Climate Institute, electric vehicles bought in 2026 are projected to save up to $3,200 over a 10 year period. The NRDC also reported that electric car owners usually spend almost 60% less each year on fuel based costs compared to gas-powered car owners. Additionally, small businesses can use the growing customer preference for eco-friendly brands to improve their competitiveness in the market.
Roadblocks Ahead: The Problems With Adopting Electric Vehicles
Despite the benefits of EVs, SMEs are finding it incredibly difficult to get a hold of these vehicles. Unreasonably high upfront costs remain a primary concern for many SMEs who are thus deterred from investing in electric vehicles. In 2023,CTV News reported that the average cost of electric cars was bumped up to nearly $73,000 which is miles away from what households and businesses are willing to spend on vehicles. A national survey conducted in 2024 by AutoTrader found that 46% of people who do not own an electric vehicle were interested in buying one, however this used to be at 68%, showing a decrease in the demand for EVs. According to the AutoTrader’s VP, this stems from a lack of charging stations available in Canada as there are only about 5000 public stations.
Overcoming The EV Adoption Problem
While adopting EVs comes with several challenges, SMEs can use government incentives to overcome some of these problems. Government subsidies can alleviate the financial burden associated with electric vehicles, making it a more accessible option for small businesses. The Government of Canada launched a Zero-Emission Vehicle Program back in May 2019which gives customers who are looking to purchase an electric car, a $5,000 subsidy. Similarly, customers looking to get hybrid-cars are also eligible for a $2,500 subsidy. Collaborative efforts made by small businesses and government agencies can increase the accessibility to electric cars and charging stations, thereby improving the chances of SMEs adopting EVs for their operations.
Integrating electric vehicles provides an attractive opportunity for Canadian SMEs to meet sustainable practice expectations while also improving their efficiency in the market. By working alongside other entities to obtain EVs, SMEs can take another step towards unlocking their full potential and help improve Canada’s economy in the process.
