Direct Economic Benefits of Electric Vehicles to the Province of Ontario

John Stephenson prepared this report. This is an extract from the complete report (PDF).


Numerous sources extol the benefits of Electric Vehicles (EV’s) to their owners and society. For example, estimates significant operating cost savings for owners, albeit with higher purchase cost. Others, for example, (1) conclude that the grid can handle the additional load, with some reinforcement at the distribution level. But I have yet to find any that connect the dots between higher utilization of generation and transmission (the grid) and economic benefits to shareholders (in the US) or Hydro ratepayers in Canada (where Hydro is mostly publicly owned, not for profit). The only mention of this I have seen was brief, in a sidebar in the Environment Commissioner of Ontario’s 2018 Greenhouse Gas Progress (ECO Report) (2). In this paper, I have elaborated the points in that sidebar to roughly quantify the direct economic benefits of EV’s to the Province of Ontario.

EV’s provide indirect, hard to quantify economic benefits from reduction of health and climate change impacts. The climate change impact is of special concern in Ontario. Transportation represented 35% of our greenhouse gas emissions in 2016 as compared with just 30% from Industry (2, Table 1.1).

Currently, industry appears to be the only, or at least the main, sector addressed by Ontario’s climate change plan. That is in the proposed Emission Performance Standards (3) that aim for only a possible (not a sure) marginal reduction in only the non-process emissions, which are about half of industrial emissions (i.e. an uncertain, marginal impact on a fraction of a fraction of the problem). Clearly, Transportation must also be addressed to meet our reduction target of 30% by 2030. Policies to hasten adoption of EV’s would serve that purpose. After shutting down coal-fired power stations, this is (in my opinion) now the lowest hanging fruit of significance relative to the emission reduction goals.

The reasons I say it is the lowest hanging fruit are: (1) electricity is a lower cost fuel for mobility than gasoline or diesel, whereas it costs more than natural gas for building heating, which is, therefore, going to be harder to decarbonize and (2) there are quantifiable and significant direct economic benefits, as described in this paper, which would also serve the government’s promise to protect jobs and make life easier for ordinary, hard-working tax-payers. The Progressive (?) Conservative government of Ontario could enact policies to promote EV’s that would be OK with its tribe of closet deniers and couldn’t-care-lessers because they would ostensibly be for economic reasons. The federal Liberal government, in trouble because of carbon pricing, could point to how carbon pricing supports EV’s and develop some complementary EV friendly policies to answer the critics that it is obsessed with carbon pricing and can’t think of anything else to do.


The following are some high-level numbers that I either calculated myself, rather quickly, more or less on the back of an envelope, or took from specific references, but I believe they illustrate fairly the significant potential:

  • Savings estimated over 10 billion $ (+) per year from reduced imports of petroleum products
  • Savings to individual motorists of $700 to $2,200/year in fuel, plus reduced maintenance
  • Potential cut in Hydro Rates of up to about a third (seems incredible, but see work-up below under How much would EV’s save Ratepayers?)
  • Net Impacts of EV Manufacturing, by 2025
    • Total income increases by over $2 billion/year
    • Over 19,000 additional person years of employment
    • $241 million additional tax revenue for provincial government

Policies to boost EV sales to complement the Federal carbon pricing could include all of the following: quotas (essentially) for auto-makers (similar to the CAFE standards), government procurement, feebates (rebates for EV purchases paid for by fees on non-EV purchases), facilitating/requiring more rapid installation of charging stations (suggested through local Hydro utilities, as a related business) and zero emission zones.

The complete report (PDF) can be downloaded.