Ontario’s EV Support Program Is On The Money

This post was jointly written by Cara Clairman, President and CEO, Plug’n Drive, with Keith Brooks, Programs Director at Environmental Defence, a Canadian environmental organization working towards a greener, healthier and prosperous life for all.

plugging-inOntario’s five-year Climate Change Action Plan, released last year, contains over 80 actions that the province will pursue as it fights climate change. Among the actions listed is a rebate program offering incentives of up to $14,000 towards the purchase of an electric car. Putting dollars into electric cars makes a lot of sense.

Transportation is the largest source of carbon pollution in Ontario, and personal vehicles are the largest contributor to those emissions. The surest way to reduce emissions from personal transportation is to electrify the vehicle fleet – which will bring big climate benefits in Ontario because the province’s electricity sector is almost completely decarbonized, thanks to the coal phase-out.

And one of the most effective ways to get people into electric cars is by offering incentives.

Forecasts for Electric Vehicle (EV) sales are being adjusted up dramatically as automakers work feverishly to roll out affordable electric cars with longer ranges, intended to compete with the Chevy Bolt – the car of the year – and Tesla’s much anticipated Model 3. But, many of these cars are still a few years away, as is some of the infrastructure needed to support a mass move from internal combustion engines to electric vehicles.

But there are still very good reasons to propel EV sales forward now. You have to begin somewhere to build momentum, which is what’s happening in Norway. Today, less than 5% of cars in Norway are electric, but the country’s transport minister said it is realistic for Norway to end the sales of fossil fuel powered cars by 2025. According to the Economist Magazine, fiscal incentives, not an outright ban, will bring this about. Knowing that, Ontarians should be happy to learn that this province offers the most generous incentives of any jurisdiction in North America.

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There are other reasons for Ontario to support electric cars. For one, unlike oil and gas, low carbon electricity is made here in Ontario and spending on electricity comes back to Ontario in the form of local infrastructure and local jobs. Plus, Ontario has a surplus of electricity at night right now, which we sometimes export at a loss. It would make more sense to use that low-carbon power here – to benefit the environment and our own economy, which is why Ontario’s Climate Action Plan also plans to offer free overnight charging for electric cars.

The move to electric vehicles will also bring health benefits, just as the coal phase-out did. A recent report from the American Lung Association of California found that cars are responsible for $37 billion in health and climate costs each year. Moving to electric cars, the study found, would make a huge dent in that.

One of the criticisms of Ontario’s EV incentive program is that luxury vehicles that few can afford receive subsidies up to the $14,000 maximum. Given that the program’s aim is to increase the number of EVs on the road, it makes sense to offer incentives for cars of various price ranges. And when measured in percentage terms, the incentive program is progressive relative to car price. The province offers almost 50% for the least expensive EV, almost 40% for fairly affordable ones like the Nissan Leaf, and about 15% or less for luxury vehicles. And there are some very high priced cars that get no incentive.

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It’s also worth noting that Ontario’s subsidies are now being paid for from revenue from the cap-and-trade program – not from taxes – which also makes a lot of sense. Carbon pricing alone isn’t enough to fight climate change. And while there are those who argue that carbon pricing should be revenue neutral, the reality is that the most effective way to reduce emissions is to recycle the revenue back into reducing GHGs.

Subsides for electric cars won’t be needed forever. Electric cars prices are coming down, and EVs will win the future, which is why forecasts for EV sales are being boosted. Bloomberg estimates that EVs will cost the same as fossil-fueled cars by 2022. But subsidies are needed for now.

And if you want to dispute subsidies, we suggest taking issue with the subsidies given out to oil and gas companies, which are much larger than those for electric cars, and which folks at Bloomberg have called “the world’s dumbest policy.” Subsides to oil and gas work against carbon pricing. EV subsidies, on the other hand, will act as a complement to carbon pricing and, as such, they belong in Ontario’s Climate Change Action Plan.

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10 thoughts on “Ontario’s EV Support Program Is On The Money

  1. Thank you for your contributions toward a greener, healthier Ontario. We look forward to seeing more electric cars on the roads and supporting our local infrastructure to make these vehicles more accessible.

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  2. If reverting climate change is the foremost concern, then I do not have an understanding why used EV’s are not given incentives of say $2,000.- $6,000. According to age; $6,000.for a two year old model and reduced a $1000.00 for each year down the scale. i.e. 2015 $6,000., down to $2,000. for a 2011 model.
    Please do not cast this aside. Open up incentives to a broader income group, allowing the masses access to used EV, which will aid in making a difference
    To add to this, is my own personal experience. I am an 88 year old Naval Vet who wanted to join the fray against climate change. Even with the $14,000. incentive I could not fit an EV into my budget. Soooo
    I went the route of getting a used 2012 Chevy VOLT. I have had it in my possession for two weeks, drive it daily and have yet to burn a drop of polluting fossil fuel.. I BELIEVE THIS IS A FEASIBLE ALTERNATIVE.!!!! I suspect that had there been an incentive of $3,000.available for my purchase I might well have moved up a year or two. A win/win for all – a newer vehicle for me, a smaller outlay from the incentive program to accomplish the same benefits and probably a better sale for the car dealer.

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  3. I have a Ford edge.2011-3.5 L, I would like to covert it to an electrical engine..
    Would i qualify for the cost of conversion.. .

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  4. That’s an excellent idea, Douglas! People are wary of things like range anxiety and the novelty of driving a vehicle with only 10% of the moving parts of an internal combustion engine car. Therefore, making used electric vehicles more affordable will make them more profitable to the public and eliminate some of these concerns. Enjoy your Volt and hopefully the price of used electric vehicles will continue to drop. Phil Buck

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  5. Yes this is an excellent idea Douglas. I am a 68 year old woman who is in the same situation financially as you. Even if I could get the 14000.00 grant I still can afford a new electric car. I understand that yes they are getting better with the technology, but if you can’t afford it, you can’t afford it. My fear, of course is that buying a used electric car, could bite me at some point. Sincerely Barbara Webb

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    • Many people are in your situation Barbara. In fact there are many that cannot afford to buy a new car of ANY sort…let alone the more expensive electric ones. I think the solution will be that, in a few years time, there will be many of the electric cars bought today in the used car lots and available for much less than new ones. We need to wait three to five years for that to happen I think. But have to start somewhere. What I think concerns the Ontario Government at least is repeated subsidy for the same vehicle. If they give 14,000 for a new one and (say) 4000 for a used one they will have given 18,000 for the same car. If it keeps getting bought and sold they will be paying the whole cost of the car over time. Not sure they can afford that.
      But I am sure we can come up with some mechanism to incentivize the purchase of used electric vehicle to make it more affordable. Most people will want to get rid of them before the battery needs replacing (many thousands of dollars to do that currently) so a used electric car may not be such a bargain. very good thought though if the intent is to reduce CO2 emissions why would you not do that to increase the uptake of these vehicles.

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  6. I wonder whether the Province has factored in the high levels of unemployment that will result. I am 100% in favor of electric vehicles but not convinced anyone has thought this through properly. I took a drive around my neighborhood and it is astonishing how much local business is dependent on the gasoline vehicle. Not using gas means no gas stations. No fuel deliveries to gas stations and no truck drivers to do the deliveries. No oil refineries are required. All the service men and women who look after the pumps are not required. All the oil change outlets disappear. All the muffler shops disappear. All the engine service shops are gone. All the companies that make car parts will be devastated…there are very few parts to an electric car. Brakes and shocks and tires survive but brakes last longer because of regenerative braking. In Ontario all the engine plants will go…no engines needed along with all the businesses that make them. Indeed I will make a forecast that there will be no auto manufacturers left in Ontario in 10 years. All the businesses that make oil filters and air filters…all gone. Radiators and radiator repair shops all gone. Rubber hose manufacturers gone, Gearbox manufacturers and repair shops all gone. Alternators and starter motor manufacturers and repairers all gone.Engine casting plants all gone.
    Canadian Tire…50% of their business will evaporate… likely go broke unless they change their business model rapidly. Car dealerships…not required. Order your car online. Add the self driving aspect to it and all the taxi drivers are gone, all the delivery drivers are gone, all the truckers are out of work. It just goes on and on and on. The knock on effect of mass layoffs on an unprecedented scale will make the situation even worse.
    So when I took all of that out of my neighborhood there was truly not very much left except sub shops and pizza parlors and health care…but with so much clean air and less illness they will likely close their doors (or a number of them). So all the good news may end up crushing the economy and throwing hundreds of thousands of people out of work. What work will replace it?
    In Northern Ontario paper recycling and increased electricity prices due to our move from coal, shutdown the entire pulp and paper industry.
    I don’t want to be negative but perhaps I can see what is coming by not looking at this though the rose colored glasses that others do.So be careful what you wish for. The result may not be entirely what you want.
    I will buy an electric car anyway as I do not depend on work for income but I feel very sorry for all the people about to be seriously affected by this who will see their jobs vanish. I cannot see what will replace the large numbers of jobs that will go. I was in a Tesla store in Honolulu recently and they had the top off so one could see the whole inner workings. I was totally shocked at how few parts there are to these vehicles. BAsically motors, battery wheels, brakes and suspension. If you are in those business you will make it through but if you make any of the other parts I mentioned….It is going to be ugly.
    Malcolm

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  7. It’s a brave new world! Getting off our carbon cars. Imagine a clean city with little air pollution. Paradyme change! Maybe all those workers can reinvent themselves and work in the new green technology world. They will have time.

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  8. I would very much hope they do find other work Robert. But where are all those jobs…in the numbers that they are needed…going to come from? One only has to look at the effect of Amazon on the retail industry to see where the brave new world of technology will take us. Just this week Toys R Us went into bankruptcy…another whole slew of retail jobs gone. Cinemas are going out of business due to on-line movie streaming via Netflix. I am not sure we are going to like what it is we are creating for ourselves. I feel the Law of Unintended Consequences is going to bite us very hard unless we manage this change very skillfully. I do not see anything that gives me confidence that the inevitable end result has been properly thought out.
    It is difficult to buy an electric car when you have no income and we are systematically going about destroying the income streams of millions of people with little of nothing to replace them.
    That’s a bit of a problem with no apparent solution in my opinion.
    Enjoy your new electric car. I will be test driving one this weekend.

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