The sudden news that the B.C. government is changing its electric vehicle rebate program has the province’s automotive dealers and its association disappointed and confused.
Qualey said his association was informed earlier this week that the CleanBC program dealing with EV rebates was being modified. The update came via a classified email from the Ministry of Clean Transportation. Based on that update, Sport Utility Vehicles, stations wagons and vans, which were previously listed in their own category, will now be classified in the car category. Moreover, the cap ceiling for rebates will be lowered to $50,000 from $55,000.
“With EV sales increasing and currently at record levels, the Ministry is making these changes … to ensure rebates are targeted for middle-income families,” wrote James Donald, Executive Director of Clean Transportation, in the email obtained by Canadian auto dealer.
“The Ministry is providing a grandfathering period of 30 days to allow customers that are currently in the ZEV buying process to receive a rebate for a vehicle that is no longer on the eligible vehicle list,” he added.
The program offers up to $4,000 in rebates for plug-in hybrids, battery electric and fuel cell-powered cars. The changes will effectively remove about 75 percent of the models that qualified for the program, said Qualey.
B.C. dealers were stunned when notified about the news.
John Kot, President of Kot Auto Group which retails Hyundai, Genesis, Kia, Nissan and Chrysler, said his company will be affected significantly because two to three models per manufacturer are no longer eligible for the rebate because they retail for higher than the $50,000 threshold.
“There’s not a lot of choices that are in that price range, so it’s going to be a harder sell for those products,” said Kot. “I’m disappointed. There’s been a big mandate from the government on electric vehicles, so to start cutting the rebates takes a step backward.”
B.C. has a zero emission vehicle mandate that will require 26 percent of all sales and leases to be electric vehicles by 2026, 90 percent by 2030 and 100 percent by 2035.
He said his company has had some success selling EVs, though the demand has lowered in B.C.
“This is going to make it harder as well,” said Kot.
Vaughn Wyant, President and CEO of the Wyant Group, which retails Audi, Jaguar, Land Rover, Porsche, Volvo and Hyundai stores, said there are very few cars that will fall into the $50,000 category. He said the announcement is a smokescreen for the fact the government doesn’t have any money in its budget to continue to support the program in its previous eligibility.
“This way they can say, ‘We’re still green, we still believe in this, we’re just going to reduce the eligibility,” said Wyant. “Really what they are doing is trying to manage their budget, because it’s way overspent.”
He said the reality is that all EVs are more expensive than regular internal combustion or hybrid vehicles. “There’s still a ton of range anxiety, infrastructure issues, and a myriad of other things that people are starting to talk more about. They thought they were ready, but they’re not.”
As for Qualey, he said the changes will have a devastating effect on the program, which he compared to a three-legged stool. He said one leg included incentives to bridge the gap on pricing between gas and electric vehicles, another leg represented charging infrastructure, and the third leg was consumer education.
“They’ve taken one of the legs out, so the whole thing is kind of teetering right now,” said Qualey. “Our big concern is issues of affordability for folks who wanted to make the transition to electric vehicles may now fall short of having the ability to do so.”
He believes the decision to change the program was because B.C. Hydro, which funds the rebate program, is having challenges generating electricity, which when flush leads to carbon credits that can be sold on the international market and generate money. He said B.C. Hydro had to import about 20 per cent of the electricity for the provincial needs last year and it could go as high as 40 per cent this year.
Qualey said his Association suggested a variety of ways to the Ministry in which it could have dealt with this issue. “But they didn’t seem to be open to any of those suggestions,” he said.
B.C. and Québec are the two top provinces in the country for EV sales. Québec recently announced plans to phase out its EV rebate program by 2027. The decision was made because the Québec government felt the rebates had acted as a catalyst for buying EVs, but sales are doing well enough now that the incentives are no longer needed. Many Québec dealers are concerned removing the rebates will, in fact, dissuade consumers from buying EVs.
When Doug Ford was voted in as the Premier of Ontario in 2018, he quickly scrapped the rebate program of up to $14,000 that was offered by the previous administration. EV sales dropped precipitously in 2019. Qualey said he expects the same thing will happen in B.C.
Tim Reuss, President and CEO of the Canadian Automobile Dealers Association, indicated via a LinkedIn in a statement that his association is “astonished and extremely disappointed” by the decision, which he said makes no sense.
“Not only was the change decided in great haste and without any consultation with the industry, but it contradicts the province’s own ZEV ambition,” said Reuss. “We strongly urge the B.C. government to reconsider this change and to immediately engage in consultation with the entire industry on how best to proceed.”
David Adams, President and CEO of Global Automakers of Canada, said in a statement on LinkedIn that the decision by the B.C. government was made too quickly.
“We’ve never suggested incentives should be in place forever, but they need to be in place until price parity with ICE vehicles is achieved — and we are not close to that,” said Adams. “The changes undermine the government’s Go Electric program and make it that much harder for British Columbians who want to go electric to make the switch and make a difficult challenge essentially insurmountable for automakers to meet 90 per cent ZEV sales by 2030.”
With vehicle price consistently being cited by consumers as the main reason why they are not switching to EVs, Adams said the move by the B.C. government makes no sense and that “British Columbians should be rightly outraged.”
Brian Kingston, President and CEO of the Canadian Vehicle Manufacturers Association, also expressed concern about the decision.
“British Columbia has the most aggressive ZEV targets in North America. Today’s announcement to further weaken the ZEV purchase incentive all but guarantees the government’s mandated targets will not be met with serious negative consequences for consumers, industry and the provincial economy,” said Kingston.
