Conducted by Équiterre in conjunction with the Mobility Chair of Polytechnique Montréal, the Centre for Interuniversity Research and Analysis on Organizations (CIRANO), HEC Montréal and Horizon Advisors, the purpose of the study entitled "The Rise of Light-Duty Trucks in Canada: Reversing the Trend” is to explain the causes behind the growing preference among Canadians for oversized, energy-inefficient vehicles as well as the consequences of this phenomenon in order to be able to propose possible solutions.
The final report also explores the motivations behind vehicle purchases, the advertising practices and strategies used by the automotive industry, the legislative framework for automotive advertising, and the most effective messages for discouraging the purchase of an oversized, energy-inefficient vehicle. As such, the study provides a comprehensive look at the issue before putting forward any public policy recommendations.
While Canada has committed to the Paris Agreement and presents itself as an international climate leader, the country remains one of the largest polluters per capita in the world and is not on track to meet its various greenhouse gas (GHG) emission reduction targets. In 2020, the transportation sector accounted for one quarter of Canada's emissions and almost half of Quebec’s emissions (44.8%), making it a key sector in the collective effort to meet the 2030 and 2050 targets.
When it comes to Canadians’ preferences for personal vehicles, the numbers speak for themselves. Between 1990 and 2018, the number of sport utility vehicles (SUVs), pickup trucks and vans in the Canadian fleet rose by 280% and by 306% in Quebec. The sales of light-duty trucks reached an historic high of 79.9% in 2020 and accounted for 81% of sales between January and September 2021.
1. A PHENOMENON WITH MULTIDIMENSIONAL CONSEQUENCES
This chapter is the result of a review of the literature on light-duty trucks conducted by Équiterre and of analyses and modelling carried out by the Mobility Chair of Polytechnique Montréal in the report entitled "Light-Duty Trucks: Impacts of the Transformation of the Light-Duty Vehicle Fleet in Quebec."
- Click here to view full report (to come)
- Click here to view the illustrated summary (to come)
Because they require more fossil fuels and resources to operate and manufacture than standard automobiles, light-duty trucks emit more GHGs and thus undermine government efforts on climate, air pollution and transportation electrification.
- Since 1990, light-duty trucks have constituted the primary source of the increase in GHG emissions related to road transportation in Canada: between 1990 and 2018, their emissions rose by 156%, compared with a drop of 19% for auto emissions.
- In 2018, light-duty trucks produced an average of 31% more GHGs per kilometre than standard automobiles.
- The increase in the number of light-duty trucks is hampering governments' electrification efforts. For example, for every electric vehicle sold in Quebec in 2019, approximately 11 light-duty trucks were sold.
- The larger the vehicle, the more natural resources it requires and the more emissions it produces: in Canada, the production of an electric SUV represents a 20% increase in median emissions compared to those for an electric car.
- With their higher fossil-fuel consumption, large vehicles contribute to air pollution, which has serious consequences for the public health of Canadians.
- In Quebec, in 2018, light-duty trucks consumed on average of 20% more fuel to travel 100 kilometers and covered 13% more kilometers than cars.
Due to their greater weight and height, light-duty trucks pose an increased safety risk to road users, and especially to pedestrians.
- The heavier the SUV, the higher the frequency of collision and the greater the risk of death: According to the literature, compared to standard automobiles, accidents caused by pickup trucks and SUVs are respectively 27% and 10% more frequent and 158% and 28% more fatal for the person driving the other vehicle
- In Quebec, for all categories of road users combined, accidents involving SUVs had the highest casualty rate in 2019, with 1,427 victims in 7,265 accidents, compared with an average of 1,309 victims for all road accidents (26,973).
- SUVs cause injuries to pedestrians that are much more serious than do other types of vehicles, primarily on account of their height and shape: in 2019, pedestrians in Quebec were most often injured in accidents involving only SUVs, with 253 victims in 1,903 accidents, compared with an average of 101 for all road accidents for the year (26,973)
A vehicle fleet that consists predominantly of longer and heavier vehicles accelerates the deterioration of the road network, resulting in longer and more frequent congestion, premature wear and tear on roads, and a significant loss of space and parking capacity.
- The greater the average length of vehicles, the more road conditions will deteriorate: if all vehicles on the road in Quebec were Ford F-150s instead of Smart Fortwos, it would take roughly twice as many vehicles to reach the congestion threshold and 2.2 times longer to travel 5 kilometers
- Between 1994 and 2019, 10 fewer vehicles were able to fit into a one-kilometer lane.
- The increased number of light-duty trucks on the road has led to an increase in the number of hours of vehicle congestion, a phenomenon that is exacerbating the annual economic losses already being generated by traffic congestion in Canada: in 2015, the figure stood at $7 billion for Toronto and $1.4 billion for Vancouver.
- The increased weight of larger vehicles causes premature wear and tear on highway infrastructure, an issue that will be even more important in the case of electric light-duty trucks because of the battery: the new Ford F-150 Lightning weighs 6,500 pounds, or 35% more than its gasoline-powered version.
- In nearly 20 years, the total space occupied by the Greater Montreal area’s vehicle fleet has increased by 45.5%, rising from 1,338 to 1,948 hectares, or space lost equivalent to 17 times the size of Montreal’s Parc Lafontaine, all due to increased motorization and the increased presence of large vehicles in the automobile fleet.
The incentive to over-consume light-duty trucks, driven by auto-industry marketing and vehicle financing strategies, contributes to household indebtedness.
- SUVs on average are much more expensive and are a major contributor to household debt in Canada: they cost an average of $10,000 more than a standard car in Canada.
- The energy rebound effect does not allow for saving money.
- Between 1981 and 2019, 65% of the increase in household spending on private transportation has been attributed to the purchase of new light-duty trucks (pickup trucks, vans, and SUVs).
- The extension of auto loans over a longer payback period encourages consumers to buy light-duty trucks that are more expensive than their budgets allow, in addition to incurring higher interest rates and an increased risk of financial loss.
2. ISSUES OF DEFINITIONS AND CLASSIFICATION
The data presented in this section are taken from the study entitled "Light Trucks: Definitions and How the Supply Has Evolved" which was carried out by the Mobility Chair at Polytechnique Montréal.
- Click here to view the full report
- Click here to view the executive summary
- Click here to view the illustrated summary
The methods used to classify light-duty vehicles vary within the automotive industry, which does not have a clear definition for SUVs and other light-duty trucks.
- Manufacturers adopt their own terminologies for classifying light-duty vehicles: they use a combination of vehicle body, range and transmission to classify them.
- The classification criteria used to inform consumers about their purchase options are variable and subjective: Car and Driver describes three lines of SUVs, while Edmunds talks about 14.
- - A number of very different vehicles are classified under the same category: the term SUV now refers to vehicles as small as the Hyundai Kona and as large as the Lincoln Navigator.
- A number of identically sized vehicles are classified in different categories: there are vehicles of almost equal size, but belonging to four body types (sedan, hatchback, station wagon and SUV) and two vehicle types (car and light-duty truck).
There are variations across jurisdictions when it comes to the definition of light-duty trucks.
- Each public authority defines vehicles according to its own objectives, which results in inconsistencies: they variously use weight, physical characteristics, mechanical components, users or number of passengers when classifying vehicles.
- Quebec is the only province that has set a threshold of 3,000 kg for vehicles to qualify as “light," while at the federal level, the threshold is set at 10,000 pounds (4,536 kg).
- The U.S. Environmental Protection Agency classifies vehicles according to their interior volume, but classifies SUVs according to their weight.
- The terms used to refer to light-duty vehicles are not standardized in the English and French legislative texts.
3. UNDERSTANDING THE EVOLUTION IN THE SUPPLY OF LIGHT-DUTY TRUCKS
The data presented in this section are taken from the study entitled "Les camions légers: Définitions et évolution de l'offre" conducted by the Mobility Chair at Polytechnique Montréal (see section 2 for documentation).1. How have vehicle characteristics evolved over time?
For over a century, vehicles have been increasing significantly in size. At the same time, vehicle models and versions have expanded.
- Vehicles have become wider, longer, higher, and heavier: between 1994 and 2019, vehicle mass increased by 25.3%, footprint by 11.1%, wheelbase by 7.4%, width by 5.5%, and length by 5.3% (10 fewer vehicles will now fit into a one-kilometer lane).
- The increasing size of all vehicle features is a testament to the phenomenon of "road obesity" that we are seeing today: sedans are now approaching the size of mid-size SUVs, while becoming increasingly divergent from hatchbacks.
- Automakers are focusing on an increasingly customized offering of their vehicle models: between 1994 and 2019, there was a 42% increase in the number of vehicle models on the market and a 60% increase in the number of versions.
- The diversification in the range of models and versions on offer allows manufacturers to position themselves on all levels of the market, which is extremely profitable for them.
The advent of CUVs, which are often smaller, more fuel-efficient and cheaper than traditional SUVs, is contributing to the growing popularity of light-duty trucks.
- The similarity in size of CUVs to cars is contributing to their dominance in the current market.
- The proliferation of CUVs with their broad choice of features exacerbates the blurring of definitions and classifications of light-duty vehicles.
4. UNDERSTANDING THE DEMAND FOR LIGHT-DUTY TRUCKS
The data presented in this section are taken from the study entitled "Light-Duty Trucks: Factors Contributing to the Transformation of the Light-Duty Vehicle Fleet” which was carried out by the Mobility Chair at Polytechnique Montréal.
- Click here to view the full report
- Click here to view the executive summary
- Click here to view the illustrated summary
The growing and increasingly diverse demand for large vehicles can be explained by a variety of economic, political, technical, legislative, social and psychological factors.
Some of the factors driving the demand for larger vehicles include:
- Economic conditions that are favourable to increased vehicle-related spending at both the macroeconomic and household levels, including easier access by households to credit and car loans;
- A less-restrictive regulatory framework in terms of fuel efficiency for SUVs and other light-duty trucks, thus favouring their manufacture;
- The appearance of large vehicle models tailored to all budgets (crossover utility vehicles);
- Land-use planning that favours urban sprawl and, therefore, dependence on the single-occupancy vehicle;
- Perceptions related to road safety;
- Social norms.
Throughout the history of the automobile, automakers' marketing strategies, government policies and consumer preferences have all played a major role in the current popularity of light-duty trucks.
- 1904-1918: Appearance of the automobile for a wealthy clientele fascinated by the speed, luxury and sense of freedom offered by the vehicle.
- 1918-1945: Post-World War I democratization of the automobile with the offer of various vehicle lines and the appearance, beginning in the 1930s, of the distinction between cars and trucks, the latter being intended for commercial and institutional use.
- 1946-1972: Development of the car culture, with the station wagon being seen as the vehicle for the average American family.
- 1973-1979: Oil shocks leading to a sharp rise in oil prices and the introduction of GHG emission standards for light vehicles in North America, which are less restrictive for light-duty trucks and promote the offering of fuel-efficient models of cars.
- 1980-2000: Emergence of the light-duty truck niche in passenger transportation as a result of trade agreements limiting the importation of smaller foreign vehicles and as a rebound effect of improved vehicle fuel efficiency.
- 2001-2007: Diversification of light-duty truck offerings and the introduction of CUVs mark a turning point in the "trucking" of the Canadian fleet.
- 2008 to present: Increased popularity of SUVs and CUVs, thanks to government financial support for the North American automotive industry promoting this type of vehicle.
The federal Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations have a number of weaknesses that could produce an effect that is contrary to the desired impact of improving vehicle fuel efficiency.
Less-stringent emissions standards for light trucks than for cars and incentives for the adoption and development of inefficient technologies mean that it is easier for manufacturers to meet the regulations.
Under the current system, it is possible for car manufacturers to end the year with higher actual emissions from their sold vehicles, but also with higher allowable emissions.
It has also been found that an early vehicle replacement program in British Columbia may have accelerated the growth in demand for light-duty trucks and the reshaping of that province's vehicle fleet.4. Which economic factors are driving the trend toward oversized vehicles?
The purchase of light-duty trucks is being driven by a combination of factors relating to households, governments and financial services.
- Rising incomes and access to credit have had a significant impact on the number of household vehicles: rising from $6,730 to $10,476, the average Canadian household spending on vehicle ownership increased significantly between 1981 and 2019, with 65% of this increase attributable to spending on new light-duty trucks.
- The maintenance of the price of oil at reasonable levels by the Canadian government in order to limit the impact on the demand for vehicles in Canada fosters the purchase of larger vehicles that are recognized as the most highly polluting in the world.
- The credit rates offered by financial institutions encourage buyers to finance their vehicles: in Quebec, 88.3% of new vehicles are financed and the growth of household debt that relates to automobile loans now exceeds all other forms of credit.
- Long-term financing for SUVs, which cost an average of $10,000 more than a car, is seen in higher interest rates than for cars, making them more profitable for financial institutions.
- With the introduction of lower emission standards for light-duty trucks, manufacturers have favoured the production of this type of vehicle, which enables them to more easily achieve their overall emissions targets (see Question 3 for details).
- Working with financial institutions, dealers use a variety of sales tactics to encourage the purchase of light-duty trucks—interest-rate promotions, bi-monthly or even daily payments, spreading payments over longer terms, etc.
SUV and CUV ownership is increasing significantly across all socio-demographic groups and household types and in all Canadian provinces.
- All types of households are purchasing light-duty trucks (renters, singles, families, etc.), but the largest expenditures are seen among couples with children and households that own their own housing unit.
- Homeowners and couples households with or without children spend on average 1.5 to 2 times more on light-duty trucks than on cars.
Age and gender
- Between 1999 and 2019, light vehicle ownership among those aged 55-64 and 65+ increased significantly, rising from 14% to 21% and 12% to 20% respectively. This reflects the persistence of motorization over time: someone who owns an SUV at age 18 is likely to own one at age 55.
- The number of SUVs and CUVs on the road is increasing sharply across all socio-demographic groups, but is most pronounced among men over 45.
- The most sought-after SUV features vary according to age group: those under 30 look especially for off-road capabilities, those between 30 and 44 value space for family-related needs, and those 45 and older value the overall practicality of the vehicle.
- Traditionally purchased by men, SUVs are now increasingly appealing to women: among women, the largest share of the SUV market (35%) is found among those aged 35 to 44.
5. UNDERSTANDING WHAT MOTIVATES THE PURCHASE OF LIGHT-DUTY TRUCKS
The data presented in this section was the subject of one of the components of the study entitled " Achat de camions légers au Canada: Analyse des motivations,” carried out by CIRANO and HEC Montréal.
Intentionality to purchase an SUV is influenced by various factors internal and external to the individual.
Some of the key internal factors identified were:
- Socio-demographic and contextual factors (location, lifestyle, age, household income);
- Personal psychological factors (values and attitudes);
- Vehicle-related and handling factors (vehicle instrumentation, and symbolic and emotional aspects).
The external environment (social norms, media and advertising) also plays a role in the development of individual preferences.2. What are the key findings with respect to internal factors?
Living environment, household size, income level, values, perceived safety, price and financing options all weigh heavily in the decision to purchase a light-duty truck.
- Women and those between 25 and 34 are more likely to purchase an SUV.
- Rural residents are significantly more likely to purchase a pickup truck than persons living in an urban area.
- The provinces with the highest intentions of purchasing an SUV are Newfoundland and Labrador, New Brunswick, Alberta and Saskatchewan.
- The provinces with the highest intentions of purchasing a pickup truck are Saskatchewan, Alberta and New Brunswick.
- As the number of persons in a household increases and family incomes rise, so does the likelihood of purchasing an SUV.
It was observed that those individuals who were most likely to purchase an SUV place a high degree of importance on values such as ambition, power, influence and authority, and enjoy driving. We also found that individuals who have strong environmental values or who view a vehicle as simply a means of getting from point A to point B are less likely to purchase an SUV than those who view their vehicle as indispensable (this was the true for 5.73 out of 7 individuals).
- When it comes to choosing a vehicle, the most important criteria are safety in the event of an impact, safety under various weather conditions and price.
- Financing options available: SUV owners are more likely to avail themselves of dealer-offered financing, and car owners are more likely to use their personal savings.
Information sources, such as dealers and friends, descriptive social norms and the media all have a significant influence on vehicle selection.
- The various sources of information available exert a significant influence on vehicle selection;
- Dealers are the most recurrent source of information when it comes to selecting a vehicle, followed by friends and family and third-party websites;
- Descriptive social norms constitute the most significant factor influencing the likelihood of purchasing an SUV, which means that the approval of others largely influences our decisions;
- The influence of the media on the choice of an SUV as our next vehicle is significant.
The decision to purchase an SUV is motivated by a feeling of superiority, control, safety and conformity that drivers associate with this type of vehicle.
Persons who own an SUV:
- Are convinced of its superiority, especially in terms of comfort and safety in the event of a collision or under changing weather conditions;
- Feel that the vehicle's larger size, height and weight create a feeling of strength and stability;
- Love their vehicle because it gives them a sense of control;
- Are little concerned about the danger that their vehicle may pose to others;
- Find it "normal" to own an SUV, either because of the ever-increasing average vehicle size or because of the strong influence of the family, a concept closely associated with this type of vehicle.
6. UNDERSTANDING THE ROLE OF AUTOMOBILE ADVERTISING
The data presented in this section are taken from the Équiterre study entitled “Limitless: Car Advertising in Canada - Practices, Regulatory Framework and Recommendations.”
Automotive advertisements in Canada promote light-duty trucks by highlighting environmental dominance, attractive financing terms, technology and safety.
- Most advertising uses the natural environment to sell light trucks: environmental dominance is often depicted, using off-road vehicles in natural settings;
- SUVs are depicted in a variety of locations, which may suggest that they are versatile as a result of exposing the public to a high number of ads;
- Discounts and product scarcity are often promoted through trade shows or different seasons of the year;
- Vehicle safety and technological aspects are frequently highlighted in more than one way in the same ad, especially for crossovers and SUVs;
- Attractive financing terms are very often promoted (through special offers, down payment arrangements, low or zero interest rates, deferred payments, etc.);
- There are virtually no vans in the ads, indicating that SUVs have replaced them in the market;
- Some ads highlight the vehicle’s fuel efficiency without offering any data on fuel consumption;
- None of the ads mention the vehicle's fuel consumption and/or CO2 emissions, and fewer than half show the retail price.
These messages undermine the making of informed decisions when it comes to selecting a vehicle.2. How much is spent on automotive advertising?
The automotive industry ranks first in terms of spending on digital advertising.
Automotive advertising, including advertising for light-duty trucks, is big business in Canada. While 47% of new vehicle purchasers say they are influenced by some form of media throughout the buying process, in 2018, the auto industry alone accounted for 21% of all spending on digital advertising.3. Which laws, regulations and standards govern automotive advertising in Canada?
Canada’s advertising legislation is inconsistent with government climate change targets and needs to be changed to reflect the climate and environmental emergency.
- There are no federal controls over automotive advertising prior to broadcast: the Canadian system acts only after a complaint is received, and industries only apply Canadian Advertising Standards on a voluntary basis.
- Some sectors have specific codes they must respect, but not the automotive industry, allowing it to promote oversized vehicles with few legal constraints despite their multiple harmful impacts.
- Advertising standards and legislation, both federal and provincial, are evolving in response to emerging public health issues and emerging public policy debates, but the environment has not yet been factored into these tools.
Canada could learn from the more stringent requirements in place, notably in Europe and Oceania, to regulate automobile advertising.
- Belgium: Advertisements may not mislead the public about the environmental effects of the product, and there are clear restrictions on the depiction and use of locations outside the public road network.
- United Kingdom: Automobile advertisements must include information on the vehicle's fuel consumption and CO2 emissions.
- New Zealand: Automobile advertisements must not encourage or depict environmental damage in areas of significant conservation value (e.g., riverbeds, wetlands, peatlands, lakeshores and estuaries).
- Sweden: Terms such as "environmentally friendly" may only be used if, throughout its life cycle, the product does not harm or improve the environment.
Respondents approve of SUV-related advertising messages, but point to a lack of transparency on price and expressed their mistrust of the auto industry.
Participants in the focus groups:
- Said they were aware of the marketing practices designed to make large vehicles more appealing;
- Nevertheless appeared to be influenced by the advertising, based on the ease with which they recalled portrayals of the outdoors and scenes of adventure;
- Associated SUV dominance of a harsh, hostile environment with safety; and
- Mentioned the emotional attachment promoted in advertisements even sometimes going so far as to portray the SUV as a member of the family.
Price and financing options
Participants in the focus groups:
- Pointed out how price and financing information is prominently featured in the ads, and felt that they were aware that these are tactics intended to make SUVs appear more affordable than they actually are;
- Were often able to relate the experiences of people they know who have had difficulty making the required payments; and
- Felt that it is important and helpful to have information about the total cost of vehicles included in the ads.
Information regarding the environmental impact
Participants in the focus groups:
- Felt that it is not necessary for vehicle advertisements to include information about environmental footprint or fuel consumption;
- Do not trust manufacturers to make accurate claims about vehicle fuel efficiency or are unable to make sense of this information when it is presented in a simplistic manner;
- Believe that fuel economy information (fuel cost and use, GHG emissions) is primarily dependent on driving style and is therefore not objectively comparable.
7. REVERSING THE TREND: RECOMMENDATIONS
“We have a collective addiction to light-duty trucks. We now need a shock treatment to get us off them. While most sectors are reducing their GHG emissions, Canada is still behind on its climate targets and emissions from the transportation sector are increasing. Advertising practices are exacerbating this trend." – Andréanne Brazeau, Mobility Analyst
- Recognize the rise of light-duty trucks in Canada as a public health and safety issue;
- Establish an independent, multi-sectorial advisory committee to support governments;
- Establish an automatic and universal classification system for light-duty vehicles based on Canada's regulatory objectives;
- Implement measures to reduce the supply of large vehicles:
- Revise the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations;
- Provide direct and indirect financial support to the automotive industry contingent on accelerating the electrification of light-duty vehicles.
- Implement measures to reduce the demand for large vehicles:
- Establish a feebate system that is self-financing;
- Maintain Canada's position of gradually increasing the price of carbon;
- Introduce kilometre-based pricing;
- Introduce tax-creditable vehicle retirement programs on a broader scale.
- Progressively increase the regulation of automobile advertising:
- Systemize the archiving of automobile advertisements;
- Systematize the collection of data related to the automotive industry's advertising investments;
- Restrict automotive industry advertising practices along the lines of existing restrictions (tobacco, speeding, advertising to children);
- Establish a mechanism to review and validate the content of automobile
- Require an increasing share of ZEV advertising spending relative to light gasoline-powered vehicles;
- Establish a cap on advertising for zero-emission, oversized vehicles.
- Launch campaigns to promote sustainable mobility with messages adapted to the various settings and audiences.
"There are many areas of intervention that are emerging. Changing the narrative around what is considered normal or desirable by society is necessary. SUVs should no longer be seen as something to aspire to. Now that they have become the symbol of the family, we need to ask ourselves what legacy we want to leave our children. Do we really want ever larger vehicles that threaten our living environments?" - Andréanne Brazeau, Mobility Policy Analyst at Équiterre
To conduct this research, Équiterre received funding from the Contributions Program for Non-profit Consumer and Voluntary Organizations of Innovation, Science and Economic Development Canada. The views expressed herein are not necessarily those of Innovation, Science, and Economic Development Canada or the Government of Canada.