Make It Worth My While: EV Stats Point to an Ongoing Thirst for Subsidies
If you’re stinking rich, few things stand in the way of any purchase. For [s]plebs[/s] consumers of lesser means, pocketbook considerations factor much more heavily into all purchases. You author, by the way, feels pretty good about stockpiling discount meat in his freezer.
When it comes to electric vehicles, limited range and higher sticker prices serve as roadblocks to widespread consumer adoption, regardless of passionate lectures from politicians and online people. There’s progress being made on both issues, but spiffing new green rides remains a go-to method of stimulating sales. A pile of someone else’s cash on the hood goes a long way to sealing a deal.
In Canada, the U.S., and other developed nations, that EV cash comes from your friends and neighbors, not the manufacturer. And if Canadian data from May shows anything, it’s that the appearance of a modest rebate does little to get buyers in the mood to go green. Go big or go home?
We’ll set aside the debate about whether taxpayers should be subsidizing the sale of $50,000 private automobiles and revisit it at some other date. For now, we’ll take a look at one country’s response to a modest federal rebate of $5,000.
According to Transport Canada data published by Montreal’s La Presse newspaper (h/t to Driving.ca‘s David Booth), consumers only seemed willing to take advantage of the rebate if they can combine it with a larger rebate offered by a lower-tier government. In Canada, two provinces (British Columbia, Quebec) offer their own incentive. That rebate amounts to $6,000 for B.C. buyers and $8,000 for Quebec buyers, bringing the combined savings to $11,000 and $13,000, respectively.
Canada’s Incentives for Zero-Emission Vehicles (iZEV) program came into effect May 1st, providing a $5,000 rebate for buyers of eligible electric vehicle models with a starting price below $45,000. The incentive covers those same models optioned up to $55k. (You’ll recall Tesla’s 93-mile, Canada-only base Model 3, created solely to slide under the cutoff by one buck and make the Standard Range Plus model eligible.)
A lesser federal rebate of $2,500 is available for eligible plug-in hybrids.
Between May 1st and May 28th (the final few days were a holiday weekend), Transport Canada recorded 3,496 rebate applications from dealers enrolled in the iZEV program. That number means nothing all by itself; indeed, finding accurate monthly EV sales data for separate provinces is impossible, but one figure stands out from Transport Canada’s breakdown: Ontario’s EV figure.
While incentive-flush Quebec sent in 2,998 rebate applications and B.C. 1,295, the more populous province of Ontario filed just 176 applications. In the third quarter of last year — a quarter whose beginning coincided with the elimination of the province’s $14,000 EV rebate — Ontario recorded sales of 5,808 plug-in hybrid and fully electric vehicles.
It’s a head-scratcher. The online form required to send the federal application went live on May 15th, though the rebate applies to all vehicles sold after the start of the month. Could Ontario really have sold so few zero-emissions vehicles in the absence of a larger rebate? According to Electric Mobility Canada, citing IHS data, plug-in sales in Ontario sank 15 percent in Q4 2018, reflecting the sudden lack of incentives. Data for this year in thus far unavailable.
Nissan Canada is on the record as saying the elimination of the provincial EV rebate hurt Leaf sales in Ontario; separately, the company also said the $5,000 federal grant, added to the two remaining provincial grants, led to a surge in sales in B.C. and Quebec last month.
One month’s figures does not paint a broad or definitive picture. Many buyers may have waited until after May 1st to purchase electric or plug-in vehicles in B.C. and Quebec. As well, Ontario’s data may not be indicative of a wholesale slaughter of EV sales — the Tesla Model 3 remains a status symbol among younger, well-off progressives. Maybe dealers were slow to send in those applications? More months will be needed to add clarity.
Still, with what we have to go on, it appears that relatively small incentives don’t do much to stimulate the sale of pricier, shorter-range electric vehicles, but big cash dumps can be counted on to keep up the flow of buyers. The increasing availability of electric vehicles that can actually get you to another city on a single charge helps that growth.
Take away the government’s help, however, and the forces of high gas prices (B.C. and Quebec really nail you at the pump) and widespread environmentalism probably wouldn’t be enough to make the EV segment much more than a niche.
In the five-year span from 2013 to 2018, 97 percent of EVs sold in Canada went to buyers on Ontario, Quebec, and B.C. At the time, all three provinces offered incentives for their purchase. Home to most of the country’s population and its largest cities, the three provinces could be expected to garner the bulk of Canada’s EV sales. With the greater population and sales comes more public recharging infrastructure and a closer proximity to other cities, making for a more favorable environment for EV ownership.
Still, greenies exist everywhere, and so do comfortable incomes. Cities are not nonexistent in places like Alberta, Saskatchewan, Manitoba, and Nova Scotia. As well, chargers can be installed in private garages for not too much money; indeed, this is where the vast majority of EVs regularly fill up.
Clearly, cost is still a leading factor in the electric vehicle’s suppressed popularity (referring to both purchase price and fuel price). Case in point: British Columbia, which boasts the highest gas prices in North America, an $11,000 combined EV rebate, and a population of 5 million, sent in 1,295 rebate applications last month. Neighboring Alberta, population 4.3 million, and beneficiary of a brand new $5,000 federal rebate and the lowest gas prices in the country, sent in 10.
[Images: General Motors, Tesla, Nissan]
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