Canada budgets C$300M for rebates on ZEV sales

The Liberal Government of Canada has pledged C$300 million ($225 million) over three years to grant rebates of up to C$5,000 ($3,752) for electric or hydrogen fuel cell vehicles.

The rebates come with a caveat: The maximum purchase price of the eligible vehicle is C$45,000.

The automakers most likely to benefit from the rebates are Nissan and General Motors, which sell the Leaf and Bolt, respectively. The Bolt barely squeaks by at C$44,800, before delivery. The Nissan Leaf starts at C$40,698, also before delivery.

Toyota will soon offer the hydrogen fuel-cell Mirai, but it’s likely to be priced well above the C$45,000 threshold. It costs $57,000 in the United States. 

“We are taking steps to make zero-emission vehicles more affordable for more Canadians, with a new federal purchase incentive of up to C$5,000 for electric-battery or hydrogen fuel-cell vehicles for Canadians who want to make the switch, and pay less at the pump,” Finance Minister Bill Morneau told the House of Commons on Tuesday. “We’ll also provide immediate expensing to a full range of zero-emission vehicles, so that businesses that want to switch over their fleet can recoup that investment sooner.”

David Adams, president of the Global Automakers of Canada, isn’t overly impressed with the plan.

“The consumer incentive would seem to be more optics than anything else,” Adams told Automotive News Canada in an email.

He estimates that only seven vehicles would currently qualify for the rebate.

“The government has not included plug-in hybrid electric vehicles in the incentive, which is odd because they generally run on electric kilometers as much, if not more than pure battery electric vehicles,” Adams said. “So, because it only applies to essentially seven vehicles, it is going to distort the marketplace.  

“Moreover it does not reflect the current market given that all of these vehicles are relatively compact passenger cars as opposed to light-duty trucks.”

Natural Resources Canada will also get C$130 million over five years to deploy new recharging and refueling stations in workplaces, public parking lots, commercial and multi-unit residential buildings and in remote locations.

“The Government also wants to encourage investment in Canada’s domestic auto industry so that it can become a global leader in zero-emission transportation manufacturing,” the government says in its budget, entitled Investing in the Middle Class.

But it provides no details on what exactly that means.

The budget does propose to provide C$5 million over five years, starting in 2019–2020, to Transport Canada to work with auto manufacturers to secure voluntary zero-emission vehicle sales targets to ensure that vehicle supply meets increased demand. 

“In our view this is much better than a national zero emission vehicle mandate,” Adams said.