Electric car rebates expected to run out of cash early

Electric car advocates are pushing the federal government to put more money into its zero-emission vehicle rebate program, as the popular program is on track to run out of cash more than a year ahead of schedule.

Transport Canada data obtained by The Canadian Press this week shows 75 per cent of the $300-million program has already been spoken for, just 15 months into its three-year mandate.

The rebate, which provides up to $5,000 back on the purchase or lease of a new battery vehicle, or a battery-gasoline hybrid one, began May 1, 2019, and was supposed to run until April 30, 2022.

As of July 31, though, more than $225 million had been paid out to 53,510 drivers.

“It’s no surprise to me,” said Daniel Breton, president of Electric Mobility Canada, a non-profit agency pushing for the electrification of transportation.

Electric car sales, as a share of overall vehicle purchases, have steadily grown from two per cent of all sales in 2018 to three per cent last year, and to almost four per cent in the first three months of 2020.

But the rate of uptake is heavily concentrated in just three provinces. Quebec and British Columbia, which have sales quotas for electric cars and provincial rebates on top of the federal one, together account for 86 per cent of all the rebates.

Ontario, which had a provincial rebate until 2019, accounted for another 12 per cent, with the remaining two per cent divided among the other seven provinces and the territories.

Breton said the additional provincial rebate made buying electric cars more attractive in Quebec and B.C., but carmakers are also shipping more electric cars there because their dealers have quotas for sales. Availability of electric models is limited, and many drivers have to wait weeks or months for one.

Electric Mobility Canada wants the federal government to expand the program to include used cars and to increase the maximum purchase price of the cars that qualify for a rebate. SUVs and pickup trucks, which are more expensive, are set to come onto the market. In 2019, almost three in every four passenger vehicles sold were SUVs and pickups.

Cara Clairman, CEO of the non-profit advocacy group Plug’n Drive, said she hoped the government would provide more money for rebates when the current allotment ran out because they were making a difference.

“I think we do need a few more years of it,” she said. “You have to look at it as a climate-change program.”

Canada has set targets to have 10 per cent of all passenger vehicles sold be electric by 2025, 30 per cent by 2030 and 100 per cent by 2040. Breton said that wouldn’t happen if the rebate wasn’t expanded. Breton is also looking for the rebates to be extended to used electric and hybrid vehicles, which are now easier to find than new ones in many cases. A 10-per-cent rebate on the purchase of a used electric car was mentioned in the mandate letter for Innovation Minister Navdeep Bains last fall, but has not yet been announced.

Transport Minister Marc Garneau was instructed in his mandate letter to do more to make the electric car sales quotas. Before the pandemic, he indicated he was looking at what more to do, including extending or expanding the rebate program. Something was expected in the March federal budget, delayed by the COVID-19 pandemic.

Garneau’s spokeswoman was noncommittal Thursday when asked if the rebate program would be expanded.