With Gas Prices Rising, Should My Business Consider EVs?

The Pressure of Rising Fuel Costs and Understanding the Shift to EVs

With gas prices continuing to fluctuate and trend upward, small and medium-sized enterprises (SMEs) are feeling the pressure. For businesses that rely on transportation, whether for deliveries, service calls, or employee travel, fuel costs can significantly erode operating margins. This volatility has many business owners asking a timely question: is it time to consider switching to electric vehicles (EVs)?

EVs generally fall into two categories: battery electric vehicles (BEVs), which run entirely on electricity, and plug-in hybrid electric vehicles (PHEVs), which combine electric power with a traditional combustion engine (Natural Resources Canada, 2024). Adoption is accelerating globally and across Canada, driven by policy support, improved technology, cost competitiveness, and growing environmental awareness. For SMEs, this shift is becoming less of a future consideration and more of a present-day opportunity.

Cost Comparison: Gas vs. Electric

From a cost perspective, EVs often present a compelling long-term case. While upfront purchase prices can be higher than traditional vehicles, operational savings can offset this over time (Government of Canada, 2026a). Electricity is typically cheaper and more stable in price than gasoline (Government of Canada, 2026a). Further, electric-drive motors have 5 times greater energy efficiency and have at least 3 times lower cost per kilometer driven (Natural Resources Canada, 2024). For instance, a BEV can cost around 3 to 4 cents per kilometer at 15 cents/KWh, as compared to a 4-cylinder gasoline vehicle at 11 to 12 cents per kilometer at $1.50/L (Natural Resources Canada, 2024). BEVs become significantly cheaper to operate when charging overnight using lower electricity rates or as gasoline prices rise.

Additionally, EVs have fewer moving parts, which translates to lower maintenance costs with no oil changes, fewer brake replacements, and reduced engine wear (Government of Canada, 2026a). When evaluated over the full lifecycle, many businesses find that EVs offer a lower total cost of ownership, with SMEs taking an average of 21 months to regain their initial investments (Government of Canada, 2026a; BDC, 2023b).

Incentives and Government Support

Government incentives further improve the business case. In Canada, federal programs such as the Electric Vehicle Affordability Program (EVAP) help reduce purchase costs by offering a starting value of up to $5,000 for battery and fuel cell light duty electric vehicles (Government of Canada, 2026b). Ontario businesses may also benefit from additional grants or utility-led programs that support charging infrastructure (Government of Canada, 2026b). Tax incentives, including accelerated capital cost allowances, can also make EV investments more financially attractive (Government of Canada, 2026b).

Operational Considerations and Environment and Brand Impacts for SMEs

Operational considerations are key when evaluating EV adoption. Businesses must assess whether their typical routes align with EV range capabilities, which are well-suited for urban and regional travel but may be less practical for long-haul operations. Charging infrastructure is another factor. Installing on-site chargers offers convenience and control, while public networks can supplement for flexibility. Planning for charging schedules and potential downtime is essential, particularly for fleet operations.

Beyond cost and logistics, EV adoption can strengthen a company’s environmental and brand positioning. Reducing greenhouse gas emissions aligns with broader sustainability goals and can enhance credibility with customers, partners, and investors. As environmental, social, and governance (ESG) considerations become more prominent, demonstrating proactive steps toward decarbonization can offer a competitive edge.

Challenges and Limitations

That said, challenges remain. Higher upfront costs can be a barrier for some SMEs, and charging infrastructure is still developing in certain regions (BDC, 2023b). Range anxiety and cold-weather performance, especially relevant in Canada, require careful planning and realistic expectations (Hersh, 2025).

Practical Steps to Evaluate the Switch

For businesses considering the transition, a practical first step is to analyze current fleet usage, fuel expenses, and route patterns (BDC, 2023a). Pilot programs, preliminary evaluations, or phased adoption can help test feasibility without large upfront commitments (BDC, 2023a). Consulting with experts and conducting a detailed cost-benefit analysis can provide clarity and reduce risk, while early planning for infrastructure ensures smoother implementation (BDC, 2023a). Further, setting transition goals and applying for incentives may also assist with the process (BDC, 2023a). It is also imperative to continuously monitor costs and performance and educate your employees to ensure progress (BDC, 2023a).

Conclusion: Making the Decision

Ultimately, the decision to switch to EVs depends on each business’s unique operations and goals. However, with fuel prices unlikely to stabilize in the near term, proactive evaluation today can position SMEs for greater resilience, cost savings, and sustainability tomorrow.

🌿 For more information and assistance, reach out to Achieve Sustainability for a free consultation here or email us at info@achievesustainability.ca.

References

BDC. (2023a, May 18). How to switch your business fleet to electric vehicles. Business Development Bank of Canada. https://www.bdc.ca/en/articles-tools/sustainability/climate-action-centre/articles/how-switch-over-electric-vehicles-business-fleet

BDC. (2023b, December). The Benefits for SMEs of Taking Climate Actions. Business Development Bank of Canada. https://www.bdc.ca/en/about/analysis-research/benefits-for-smes-of-taking-climate-actions

Government of Canada. (2026a, February 18). Benefits of driving a zero-emission vehicle. Government of Canada. https://www.canada.ca/en/services/transport/zero-emission-vehicles/benefits-of-driving-a-zero-emission-vehicle.html

Government of Canada. (2026b, May 11). Zero-emission vehicles - Incentives. Government of Canada. https://www.canada.ca/en/services/transport/zero-emission-vehicles/zero-emission-vehicles-incentives.html

Hersh, S. (2025, December 18). PART 1: Electric Vehicles and EV Availability Standard FAQ - Environmental Defence. Environmental Defence. https://environmentaldefence.ca/2025/12/18/electric-vehicle-frequently-asked-questions-faqs/

Natural Resources Canada. (2024, December 23). Buying an electric vehicle - Natural Resources Canada. Natural Resources Canada. https://natural-resources.canada.ca/energy-efficiency/transportation-energy-efficiency/personal-vehicles/buying-electric-vehicle