Electric Car Rebate

July 17th, 2009 by Potato

It’s not hard to see from my previous posts that I’m a fan of electrified transportation (which is a pretentious way to say electric cars and PHEVs). So I’m generally in favour of the announced rebate for electric cars in Ontario. These sorts of rebates are great ways to get the cars into the hands of early adopters — if you can bring the price difference of the desirable technology down to the point where there isn’t a significant premium over equivalent cars, it makes it a lot easier for people to swallow their doubts about the new technology and get out there to beta-test. A few people will be willing to take the chance on the new models, but certainly not everyone, not until there’s a decade or so of real-world data, and to get that you need as many early adopters as soon as possible. It also helps draw attention to the technology so people will look into it (free advertising, basically).

I’ve seen some arguments about the rebates cropping up on the net, and I’ll address some points, but first a few of my own:

– I think it’s coming too soon. In July 2010 there will be basically zero electric cars available — maybe the Volt will see the light of day, maybe the Tesla Model S will be starting to deliver to people on the waiting list and ready for regular buyers… but that’s about it until 2011 or later. In that light it does seem less like a “electric car rebate” and more like yet another “Government Motors handout”. I mean, even if they do manage to get the Volt/Model S out in 2010, face facts, they’re almost going to California dealers anyway — delaying the onset to 2011ish to give other manufacturers a chance to catch up would be decent.

– Like I said, generally, this sort of thing works. It may not be the best use of the money, but getting people to switch to electric cars will reduce smog in the downtown core (and greenhouse gasses, and possibly help stabilize the grid). However, where electric cars work best is in urban areas where people commute every day… and if you’re going to spend money to get people to stop smogging up downtown Toronto/Ottawa, why not instead put the money towards under-funded public transit? (My answer, to myself: because there probably won’t be even 500 cars sold per year under this program, and 5 mil is a drop in the bucket to the TTC, so we can do both).

The Globe’s auto editor had this to say in favour of the subsidy:

The Americans have put in place a $7,500 US subsidy for alternative propulsion vehicles like the Chevy Volt. The Volt is a plug-in hybrid, though General Motors calls it an extended range electric vehicle. The U.S. subsidy mean Canada simply must keep up here.

This is absolute rubbish. In fact, if the Americans are doing it, that’s a perfectly good reason for us not to — now we know that someone will get the cars in the hands of the consumers so we get that precious kick-start to industry and the real-world data (though of course, that won’t be quite the same as real-world Ontario winters).

Now, if you want to argue that we should support the manufacturers to bring jobs here, then ok, cool, that keeping-up-with-the-Jones argument works… but a consumer rebate does not get Tesla or GM to build an Ontario factory.

One way that the main goals of this could be accomplished for free is a CARB/CAFE type legislation: force the automakers to have a certain percentage of electrics/hybrids and a certain overall fleet fuel economy. If they miss their targets by selling gas guzzlers, you fine them (and unlike CAFE, make them real fines). Then the manufacturers will have to raise the prices of the gas guzzlers and sell their fuel efficient models as loss-leaders to make their efficiency ratings… the quasi-free market at work.

It’s a subsidy for the rich — these cars will cost $30k and up.

I don’t have a good answer to that… does it matter to the government incentive program that the pollution reduction will come from “rich” drivers? Most new-car feebates work that way, but in theory the subsidy should trickle-down as lower resale prices for the people who will buy the cars used.

[Poor] transit-riders or cyclists, who are way greener, will be subsidizing expensive cars…

Ah, but they’re electric cars.

We have made-in-Canada electric cars that aren’t eligible for any kind of government help — they’re not even legal on Ontario roads!

Yes, the Zenn situation is somewhat tragic. The government doesn’t seem to be looking hard enough to create a neighbourhood electric vehicle standard… but even if they were road-legal I’m not sure that they should be getting subsidies because that’s the model we want to move away from with electric cars: we want cars that are better than gassers. Safer as well as more efficient.

Although I am sure rebates will work to increase sales of electric cars, I believe preferential treatment to drivers of electric cars will provide better incentive.

That’s a good point — part of the reason why California has more hybrids than other states is that for a number of years they were allowed to use the carpool lanes (and park for free in some cities). Free/priority parking is likely to be as much of an incentive as the cash, and HOV access might be too, if you happen to live in one of the few places in Ontario that has HOV lanes.


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