The decision by the Québec government to end electric vehicle rebates for consumers could have an impact on sales, though two provincial dealers contacted by Canadian auto dealer have conflicting opinions about just how much.
Québec consumers can receive as much as $7,000 for the purchase of a new EV and up to $5,000 for a plug-in hybrid. Used vehicles have a rebate of up to $3,500.
The provincial government is ending the program because it claims it is too much to reduce greenhouse gas emissions, and interest is already strong in purchasing EVs.
In 2018, when the newly-elected Ontario Conservative Government scrapped the existing Liberal Government rebate program of up to $14,000, sales immediately plummeted by more than 50 per cent the following year.
Norman Hébert Jr., President of Groupe Park Avenue, said phasing out the rebate program next year with plug-in hybrids, and fully ending it in 2027, will “100 per cent” lead to the same drop-off in EV sales in Ontario. Hébert noted, however, that Québec (unlike Ontario) has zero-emission targets that require OEMs to sell a quota of EVs in order to sell internal combustion engine vehicles without suffering a financial penalty.
“The difference in Québec is not only will EVs not sell, the price of ICE cars will go up because OEMs will have to pay fines and the fines will likely get transferred on to the consumer, so the consumer will lose,” said Hébert. “We won’t adopt EVs, and ICE cars will get more expensive. This is my big issue.”
Hugo Jeanson, General Manager and Co-owner of Québec-based Bourgeois Chevrolet, which sells more EVs than any dealer in the country, offered a counter opinion to that. While he concurred manufacturers will be charged a penalty if they don’t meet the threshold of selling EVs, he said Québec has a culture that embraces EVs regardless of rebates.
“It’s part of a lifestyle, and there’s a lot of people who even if it’s the same price as a gas car they’re going to go with EVs,” said Jeanson. “I’m really not scared about the sales going down as they did in Ontario. In Ontario, back then, there was no federal rebate. It was just provincial and it was substantial. It was too much. They went too quick, too fast. The people who bought those EVs were not even early adopters. They were just people taking advantage of an early rebate. The difference is in Québec is we went slowly with the rebates. I think even if we lose (the provincial rebate), we still have the ($5,000) federal rebate. I think we will be good.”
He said Québec’s decision will immediately create hype to purchase an EV in the short term before the rebate ends, but it is still cheaper to buy an EV.
“When you calculate the (monthly) payments with the gas you’re putting into your car, the total is more expensive than the payment of the EV and the electricity you’re putting into it,” Jeanson said. “If we’re at the same price point and there’s no advantage to make the move to an electric vehicle, I still believe it’s a better vehicle, but there’s still a lot of teaching that needs to be done to understand how those cars work because they work differently.”
Hébert said the challenge now is attracting the mass consumer market compared to the early adopters and not giving them the huge provincial rebate.
“By reducing incentives, we’ve made cars more expensive,” he said. “That dissuades consumers from buying them. That’s where I think it’s a bit counter intuitive to push aggressive EV adoption targets while reducing government support for consumers, who would not normally want to adopt them.”
He said the last three years had demand-driven economics.
“So the consumer wants, the supplier builds, consumers are fulfilled, everyone is happy,” he said. “But in the mass market, it’s not a demand-driven function necessarily, according to certain people I’ve heard speak. It’s more of an environmental- and social-driven rationale to purchase. That consumer needs incentive or disincentive to purchase an EV or not purchase an ICE vehicle.”
He added the Québec government doesn’t recognize the low level of consumer demand in the mass market for EVs.
“They believe if the OEMs build them, the consumers will buy them.,” he said. “I think that’s a bit disconnected from reality.”
