By on April 27, 2016

Porsche-918-Spyder

Two sides, two seemingly valid arguments. And in the middle, five $1.1 million cars.

Through the province’s Electric Vehicle Incentive Program, Ontario taxpayers helped lower the price of five Porsche 918 Spyders last year, according to Canada’s national broadcaster, leaving many wondering why their cash helped fund supercars for the ultra wealthy.

The program shaved just over $5,500 off the price of each $1.1 million hybrid Porsche — a limited edition model possessing 887 horsepower, with a top speed of 210 miles per hour.

One of those vehicles has since burned to the ground in a Toronto-area gas pump fire, which, for some, serves as a perfect metaphor for taxpayer-funded EV incentives.

The debate over whether to stimulate EV sales with public cash or let market forces rule the day isn’t relegated to any province, state or country. In Germany, Chancellor Angela Merkel is under fire for allocating $1.4 billion to boost her country’s stagnant EV sales.

The technology that goes into EVs warrants a higher sticker price (for now, anyway), but things get really prickly when subsidies flow to those who can well afford a high-end EV or hybrid, be it a Tesla Model X or the Fisker Karma of years past.

In Ontario, where the third-largest government expenditure is the interest payment on the province’s $300 billion debt, the debate rages anew.

Imagine the view of a resident who drives a ’02 Corolla and doesn’t make enough to purchase a new EV of any type, subsidy or not. Is it fair that they contribute to the purchase of someone else’s Tesla — and perhaps pay more at the pump to finance the program?

The flip side of the argument is that the resident stands to reap less noticeable benefits, like improved air quality, or perhaps greater investment in transit (which are funded heavily by gas taxes in Ontario), thus allowing them to ditch their old car.

When it started the program in 2010, EVs and hybrids were still newcomers to the automotive landscape. Their numbers were few, so the payout through the program wasn’t enough to ruffle feathers.

As automakers ramped up production of new models, the program remain unchanged, which led to nearly $880,000 of public money being spent on six-figure luxury EVs. That’s a lot of green spent on a small number of ultra-lux green wheels — surely, not much environmental bang for the taxpayer’s buck(s).

Belatedly recognizing this problem, the Ontario government changed the incentive rules in February. EVs costing more than $150,000 are no longer eligible, incentives for those costing more than $75,000 are capped at $3,000, and the available subsidy grew at the bottom end (to a maximum of $14,000), dependent on battery size and passenger capacity.

The changes seem more equitable, but many will still say governments have no place taking cash from one person’s hand to put a car in another person’s driveway.

With a flood of lower-cost EVs on the way, where do governments go from here? Should they double down on incentives, reform their rules, or eliminate the perk altogether?

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37 Comments on “Ontario Controversy Adds More Fuel to the EV Incentive Debate...”


  • avatar
    phxmotor

    Such a contrived subject matter:
    Such a simple solution…
    Any government contributions should be limited to EVs costing less than 35,000usd. A blanket contribution for any and all EVs or Hybrids makes no sense.
    Its such an easy target for the media to stir up emotions.
    Let’s just all ignore this issue and antagonize the media moguls who think raising our ire is their daily duty.

    • 0 avatar
      six42

      A better incentive would be take those tax rebates and put the money towards improving charging infrastructure for those vehicles. Every 20 Tesla’s sold and they have enough for a supercharger (or generic, multi-standard charging station).

      Nobody buying a Tesla or 918 needs or cares about the rebate, but they (and everyone else with an EV) sure would benefit from increased charging locations.

      That’s an incentive

    • 0 avatar
      jim brewer

      Well, if the government wants to subsidize electric cars, first get rid of the subsidies for internal combustion engines. Depending on where you live, that’s at least 40 cents per gallon. Double the child tax credit and the overall tax burden is neutralized.

      Subsidies are automatically distortive, and large subsidies are strongly distortive. Probably when they started the program the government was thrilled to see electric cars that weren’t glorified golf carts. Now we are past that and your idea is the right direction. It’s going to take awhile to get things in better alignment.

  • avatar
    Kyree S. Williams

    Typically, yes, EV credits subsidize toys for the rich. But there’s always the theory that the pricier electric cars helps spur development for cheaper ones. Tesla probably wouldn’t have been able to launch with a mass-market car like the Model 3. But Tesla is probably going to be the only startup company that will see success from a mass-market EV. The other successes will be from larger automakers like Nissan, GM or Ford.

  • avatar

    Personal cars and light trucks are about 15% of greenhouse emissions, and those subsidies would probably save a lot more GH emissions in other areas, such as insulating homes in colder climates, especially New England where many of them are oil-heated.

    I think the gov is trying to pick the winner a bit early in the game with these subsidies.

    I think it would make more sense to tax carbon in a revenue neutral manner , which would stimulate the market for alternative technologies, and which would let people decide for themselves what is most important to them.

    Nonetheless, I think there are reasonable counterarguments, and I’ll let someone else bring them up.

    • 0 avatar
      SCE to AUX

      “I think the gov is trying to pick the winner a bit early in the game with these subsidies.”

      If that was true, one would expect Nissan, GM, or Ford to be the winners, but at this point, Tesla outsells each of them.

  • avatar
    VoGo

    That’s a beautiful blue. I wish they offered it on the 718.

  • avatar
    seth1065

    Hey the rules are the rules and since no one broke the law I say good for them, I doubt they would not have sold the cars over 20K, maybe Porsche can donate some trees to the Canada. I agree that it makes sense to limit the dollar limit, but for everyone who says this is wrong remember they made more than that amount in sales tax ( I assume Canada has a similar sales tax) there is plenty of tax dollars that go from rich to middle class or poor also.

    • 0 avatar
      Thinkin...

      Winner, winner, chicken dinner.

      Ontario’s tax on new cars is 13%. So for each of these Porsche 918 sales, the buyer robbed taxpayers of $5500, but at the same time contributed $143,000 in tax to the province.

      Oh, the injustice!

  • avatar
    Master Baiter

    While we’re talking about governments pi$$ing away taxpayer money on alternative energy subsidies:

    “Lake Land College recently announced plans to tear down broken wind turbines on campus, after the school got $987,697.20 in taxpayer support for wind power.

    The turbines were funded by a $2.5 million grant from the U.S. Department of Labor, but the turbines lasted for less than four years and were incredibly costly to maintain.

    “Since the installation in 2012, the college has spent $240,000 in parts and labor to maintain the turbines,” Kelly Allee, Director of Public Relations at Lake Land College, told The Daily Caller News Foundation.

    The college estimates it would take another $100,000 in repairs to make the turbines function again after one of them was struck by lightning and likely suffered electrical damage last summer. School officials’ original estimates found the turbine would save it $44,000 in electricity annually, far more than the $8,500 they actually generated. Under the original optimistic scenario, the turbines would have to last for 22.5 years just to recoup the costs, not accounting for inflation. If viewed as an investment, the turbines had a return of negative 99.14 percent.”
    .
    .

    • 0 avatar
      VoGo

      Please compare the performance of alternative energy subsidies to the cost overruns on the F-35. One is 1% of the other.

      At least we have use for alternative energy.

      • 0 avatar
        rpn453

        The military consumes massive amounts of energy and resources. Therefore, it is okay to waste energy and resources under the guise of environmentalism.

        Wow, we just figured out a way to justify almost anything!

        • 0 avatar
          VoGo

          You misunderstood the analogy. The point was merely that government overspending isn’t unique to environmentally friendly investments.

          I believe quite the opposite: that smart investment in environmentally friendly projects that end America’s addiction on imported oil will allow us to reduce our overspending on the military.

          • 0 avatar
            macmcmacmac

            You should read a series of articles in the National Post called “Ontario’s Power Trip” to see how much of the above mentioned $300 billion+ Ontario debt is directly related to fiendishly overpriced green energy production and infrastructure.

            “Yeh, so , let’s give the green economy a kick start by overpaying small producers for their solar and wind power, give it first access to the grid, sell it at a loss to Michigan when we discover we have too much electricity, close all of our coal generating stations, but keep the gas plants simmering for when the renewables aren’t producing (almost always). Oh yeah, shove the windmills down the throats of citizens who don’t want them in their back yard, and remove all legal recourse citizens could use to delay or stop their construction. The blow another $2 billion in public money to cancel a couple of gas plants in political swing seats to guarantee winning them in a closely run election. What we lose in subsidies we make up for in generating capacity.

          • 0 avatar
            rpn453

            True, VoGo. But to me, the difference is that it’s impossible to predict exactly how much it will cost to develop new military technology, while it’s blatantly obvious that most “green” projects will consume more energy than they will ever generate.

    • 0 avatar
      Geekcarlover

      Good news! We pissed away way less money than Solyndra.

    • 0 avatar
      Brett Woods

      Sad, but was that a case of some soft soled, insulated, ivory tower types who got taken for a magic carpet ride when spending money, not theirs on something they didn’t fully understand? Similar to politicians buying weapons. Could happen to anyone.

      We had a guy who used to run a sandwich shop procuring submarines. They sucked. That case sounds like the maintenance contract was a bust. I heard the Dutch have some windmills that lasted. I think your Alaska Sea Life Center in Seward is an example of doing it right. A little more know-how applied there maybe.

  • avatar
    heavy handle

    Government incentives only work if they apply to everybody, even those that are richer than you.
    That won’t stop some from complaining about anybody who is richer or poorer then them, or appears to be. People just get into a complaining rut.
    “My tax breaks are sacred, but yours are a scandal!”

  • avatar
    SCE to AUX

    The point of the incentives is to remove evil, internal combustion engines from the road.

    The buyer’s income or price of the vehicle is irrelevant to achieving that end.

    One could even argue that incentivizing the ‘rich’ to buy a Tesla Model S is more effective, since they’re NOT buying an S550 or A8, or in this case, a conventional Porsche. There is less environmental benefit when someone buys a Leaf rather than an Elantra.

    On the other hand, you’d expect that a fixed incentive amount would more greatly benefit the purchase of low-end EVs like the Leaf. For the individual buyer this is true, but it’s interesting that Tesla is now the leading EV seller by volume. Arguably, this is due to severe product gap in low-end EVs (no 110+ mile options), so the low end market is dying off until next year.

  • avatar
    Brett Woods

    So they got a $5500 rebate. No big deal as they still paid what $137 500 taxes on it? The part about that early buyer spilling fuel on something hot while filling – uh huh, I don’t get the metaphor part.

  • avatar
    makuribu

    Some Prius driving, Birkenstock wearing reporter at the CBC got their panties in a knot over EV subsidies.

    Admittedly, subsidizing a Nissan Leaf seems more egalitarian than subsidizing a BMW i8, but it was a trivial amount of money and besides, they ended the subsidies for high end EVs a few months ago. You can still get thousands off a Leaf.

  • avatar
    heavy handle

    Here’s an idea: how about subsidizing home chargers for those who buy electric cars, instead of subsidizing the cars themselves?

    The cost would be less, and the long-term benefits would be greater.

    • 0 avatar
      mcs

      They’re not that expensive now. I think you can get one for about $345. I’d rather see the states put up CCS/CHAdeMO chargers along major travel routes. Anyway, the subsidies are ending soon for the major players.

      • 0 avatar
        heavy handle

        I’ve seen them around that price, but installation can be a killer depending on your house’s electrical layout.

        It’s a one-time cost, so a subsidy would encourage fleet electrification long-term, more-so than a cash handout. The charger will still be around long after a $5,000 incentive has been spent.

        • 0 avatar
          mcs

          The installation can vary, that’s true. If you have a dryer outlet in your garage and 30 amps is okay, then it’s nothing. A friend of mine had a welding outlet and he used that. I had a $125 NEMA 14-50 RV outlet installed to plug mine into. I can’t remember what it cost, but it wasn’t much because I already had 200 amp service. Then again, the car put the service at its limit and the new mega-kitchen is going to suck down more power than the car ever dreamed of, so an upgrade is needed. I’m also adding capacity for a second ev, so I think that electrical upgrade is going to cost about $2,500.

          One cheap alternative that I recommend is to get an EVSE that is adjustable and will work with 120 and 240. That way you can plug it into a 120v 20 amp outlet and take it all the way to 20 amps if you can. I do that at some of my work locations. Although not as fast as 30 amp 240v, it’s not bad and perfectly fine for overnight charging or charging at work.

          Also, don’t get a fixed in place EVSE. Get a portable with adapters for different types of outlets – especially NEMA 14-50 which is available at campgrounds in an emergency.

      • 0 avatar
        Brett Woods

        Like DCH said about the 15% for us civies… (Roughly 1/3 emissions from transport industry according to IPCC policy-makers-summary, however 1/3 of a total which includes all natural emissions. So it’s a bit confusing as civilian vehicles would make up more than 15% of anthropogenic emissions.) Anyway ….the other 15% of the transport sectors’ 30-33% contribution to the total of emissions comes from the Commercial sector which is <5% of traffic. The transport industry needs those superchargers and monster electro-haulers more than the rest of us. They have no choice right now. No choice at all.

  • avatar
    zip89105

    No vehicles should be subsidized, however, I have no problem with someone claiming their fair share of any available program money.

  • avatar
    John

    People do what they are incentivized to do, and well intention-ed incentives often have perverse consequences. I lived in England ’67-’68 – never saw so many what would now be called supercars. Reason? At the time, the top marginal tax rate was 98 or 99% (can’t recall). BUT – an employer-provided vehicle was not considered taxable income. So, wealthy high income employees got fancy cars instead of cash. Taxpayers funded those supercars, too.

  • avatar
    VenomV12

    Funny how these people aren’t complaining about the monstrous sales tax guys like the 918 owners are paying, or huge property taxes they are paying on their homes and potential commercial properties too. If we listed the different government subsidies various people and companies get, we would be here all day.

  • avatar
    markogts

    [treehugger mode on] Porsche 918 is not a SUV, therefore incentives are ok.

    :-)

  • avatar
    Brett Woods

    Yes, it is a rather nice blue isn’t it.


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