How Has the Auto Industry Evolved in Canada and the U.S. in the Last Decade?

The automobile industry in North America—comprising both Canada and the U.S.—has undergone significant transformations over the past decade. This evolution is shaped by technological advancements, changing consumer preferences, environmental concerns, economic factors, and government regulations. The rise of electric vehicles (EVs), advances in autonomous driving technology, and the reshaping of traditional car manufacturers’ strategies are key highlights of this period. Here’s a comprehensive look at how the industry has evolved, the brands that have made significant strides, and the statistics that showcase this shift.

1. Technological Advancements and the Rise of Electric Vehicles (EVs)

The past decade has seen the automotive industry shift toward more sustainable and technologically advanced solutions. In particular, electric vehicles (EVs) have become a driving force in both Canada and the U.S.

• Global EV Sales Growth: According to the International Energy Agency (IEA), the global electric car stock exceeded 10 million vehicles in 2020, a massive increase from 3 million in 2017. North America has been a key player in this transition, with Tesla leading the charge.
• Tesla’s Market Share: In the U.S., Tesla has become the dominant force in the electric vehicle sector. In 2021, Tesla held over 70% of the EV market in the U.S., with its Model 3 becoming one of the best-selling cars overall. In Canada, Tesla’s market share also grew substantially, contributing to a rise in EV adoption across the country.
• Electric Vehicle Sales in Canada: The adoption of EVs in Canada has been steadily increasing. In 2022, electric vehicle sales in Canada accounted for approximately 5.5% of total car sales, which is a marked increase from previous years (2.3% in 2019).
• Ford and GM’s Electric Push: Traditional automakers like Ford and General Motors (GM) have made significant strides in electric mobility. Ford’s Mustang Mach-E, an electric SUV, launched in 2020, and the highly anticipated Ford F-150 Lightning electric truck, launched in 2022, represent major efforts by legacy brands to tap into the growing EV market. GM, with its Chevrolet Bolt EV, is also aiming to go fully electric by 2035.
• Government Incentives: The rise of EVs has been supported by government incentives. In the U.S., the federal government offers up to $7,500 in tax credits for qualifying electric vehicles. Canada also provides rebates and incentives for electric car buyers, which has encouraged consumer adoption.

2. The Rise of Autonomous Driving Technology

Autonomous driving technology has seen significant advancements in the past decade. Companies in both Canada and the U.S. are investing heavily in making self-driving cars a reality, though the rollout of fully autonomous vehicles (Level 5) remains some years away.

• Waymo and Tesla’s Efforts: In the U.S., Waymo, a subsidiary of Alphabet (Google’s parent company), has been testing fully autonomous vehicles in Arizona and other locations. Tesla’s Autopilot system, while not fully autonomous, continues to evolve, with ongoing software updates adding more advanced features.
• U.S. Regulatory Developments: Several states in the U.S. have passed legislation allowing for the testing and deployment of autonomous vehicles. California, Arizona, and Nevada are among the states that have paved the way for autonomous driving development.
• Canada’s Autonomous Vehicle Efforts: In Canada, companies like Aurora (based in Montreal) and Sensity Systems (based in Toronto) are contributing to the development of autonomous driving technologies. The Canadian government has also been proactive, with the National Strategy for Automated and Connected Vehicles laid out in 2017, aiming to position Canada as a leader in this field.

3. The Shift Toward SUVs and Trucks

Over the last decade, there has been a marked shift in consumer preferences toward SUVs, crossovers, and pickup trucks. This trend has been particularly strong in the U.S. and Canada, where these vehicle types dominate the market.

• SUVs and Crossovers Dominate: In the U.S., the SUV and crossover market has overtaken sedans as the most popular segment. In 2022, SUV sales accounted for approximately 50% of all U.S. car sales, up from 35% in 2010. In Canada, this trend is also evident, with SUVs making up 43% of all new vehicle sales in 2022.
• Ford and GM Lead the Way: The American giants Ford and GM have adapted quickly to this shift, especially with their best-selling trucks. Ford’s F-Series has been the best-selling vehicle in the U.S. for over four decades, and the shift toward electric trucks with models like the F-150 Lightning reflects the growing demand for environmentally conscious options in the truck market.
• Rise of the Electric Pickup: The electric pickup truck segment is expected to grow exponentially in the next few years, with notable entries such as Rivian’s R1T and Tesla’s Cybertruck slated for release. These models offer zero-emission alternatives to the traditional pickup truck, a popular vehicle for North American consumers.

4. Impact of Global Supply Chain Issues

The global automotive industry has been heavily affected by supply chain issues, particularly the semiconductor shortage, which began in 2020. This issue disrupted car production, delayed vehicle deliveries, and increased vehicle prices.

• Car Production Declines: The shortage of semiconductor chips caused a significant decline in vehicle production. According to IHS Markit, global automotive production fell by approximately 7.7 million units in 2021 due to the shortage. This led to longer wait times for popular models and increased vehicle prices.
• Price Increases: In the U.S., the average price of a new car hit a record high in 2022, exceeding $47,000, an increase of over 30% from a decade earlier. In Canada, the average price of a new vehicle in 2022 surpassed $45,000, driven by both higher demand and limited supply.
• Shift Toward Used Cars: With new car production being affected by supply chain disruptions, many consumers turned to the used car market, causing a sharp increase in used vehicle prices. In 2022, the price of used vehicles in Canada rose by 10% compared to the previous year.

5. The Role of Sustainability and Eco-Friendly Vehicles

Sustainability has become a central concern in the automotive industry, both in terms of manufacturing processes and the products themselves. The move toward eco-friendly vehicles such as EVs and hybrid cars has been significant.

• Fuel Efficiency Standards: In the U.S., the Corporate Average Fuel Economy (CAFE) standards have been progressively tightening, pushing manufacturers to produce more fuel-efficient vehicles. The Biden administration has set aggressive targets to increase the fuel efficiency of cars sold in the U.S. by 2026.
• Canada’s Green Vehicle Programs: The Canadian government has also committed to reducing emissions from the transportation sector, with plans to achieve net-zero emissions by 2050. Programs like the Zero Emission Vehicle Infrastructure Program aim to increase the number of charging stations across the country and encourage the adoption of electric vehicles.
• Sustainable Manufacturing: Automakers in both Canada and the U.S. are increasingly focusing on sustainable manufacturing practices. For example, General Motors has committed to making all of its global manufacturing facilities carbon neutral by 2040, while Ford has also taken steps toward reducing carbon emissions in its production process.

Which Brands Made the Biggest Strides in the Industry?

Several brands have emerged as key players and made significant advances in the automobile industry in the last decade:

• Tesla: Undoubtedly the leader in the electric vehicle space, Tesla has seen its market capitalization grow exponentially. The company delivered almost 1.4 million cars in 2022, with a market share of over 70% of the U.S. EV market. Tesla’s commitment to innovation and its expansion into new markets has solidified its position as a leader in the automotive industry.
• Ford: Ford has made significant strides with its focus on electric trucks, like the F-150 Lightning, and SUVs like the Mustang Mach-E. The company has also made massive investments in electric vehicle production, with plans to allocate over $22 billion to electrifying its lineup by 2025.
• General Motors: GM has shifted its focus toward electric vehicles with the launch of models like the Chevrolet Bolt and the future of its Ultium platform for electric vehicles. GM’s goal is to transition to an all-electric future, with plans to release 30 new EV models by 2025.
• Rivian: A newcomer to the industry, Rivian made a big splash with its electric trucks, the R1T and R1S. The company raised significant capital through its IPO in 2021 and is poised to compete with Tesla in the EV space.

Conclusion

The automobile industry in Canada and the U.S. has undergone dramatic changes in the last decade, with electric vehicles, autonomous driving, and new consumer preferences at the forefront of the transformation. Brands like Tesla, Ford, GM, and newcomers like Rivian have made significant strides, while technological innovations and regulatory pressures continue to shape the market. As we move forward, the ongoing shift to sustainable, high-tech vehicles will further define the future of the automotive industry in North America.