Billions More in Subsidies Needed to Meet Federal EV Sales Goal, Auto Leaders Say

An electric vehicle is charged in Ottawa on July 13, 2022. (The Canadian Press/Sean Kilpatrick)

Auto industry leaders are calling for increased government subsidies to meet the federal mandate for electric vehicle (EV) sales, citing costs that exceed twice Canada’s annual defence budget.

“An unprecedented national effort to build charging infrastructure, expand the electricity grid, increase clean electricity production, and help more Canadians switch to electric is urgently required,” said Brian Kingston, president and CEO of the Canadian Vehicle Manufacturers Association.

He made the comment during a June 25 press conference, a day after the Canadian Automobile Dealers Association (CADA) unveiled the initiative “Countdown to 2035,” which tracks Canada’s path to achieving 100 percent zero-emission vehicle sales by 2035. The EV sales goal forms part of the Liberal government’s 2030 Emissions Reduction Plan that seeks to achieve net-zero greenhouse gas emissions by 2050.

Mr. Kingston called for increased government subsidies to incentivize consumers to transition from traditional gas-powered vehicles, noting that purchasing EVs and home chargers would cost $54.1 billion, double this year’s $26.5 billion defence budget. An additional $20 billion would be required for public charging infrastructure, he said.

His call for more government support came after Canada’s two leading provinces for EV sales rolled back incentive programs. On March 12, the Quebec government announced plans to phase out its $7,000 EV rebate program by 2027.

Earlier this month, the B.C. government also announced a shift in its rebate program, reducing the maximum cost of vehicles eligible for the CleanBC Go Electric rebate program from $55,000 to $50,000. This change means roughly 75 percent of electric and hybrid models no longer qualify for the rebate program.

The Department of Environment and the Parliamentary Budget Office put current subsidies to the industry at $151.5 billion. Subsidies include $24.5 billion to build charging stations and $52.5 billion for auto and battery manufacturers E-One Moli, Ford, Honda Motor Co., Northvolt, Stellantis, and Volkswagen, as reported by Blacklock’s Reporter.

CADA President and CEO Tim Reuss, who also attended the June 25 press conference, echoed the call for more subsidies, noting that affordability and availability are key for consumers to transition to EV, stating that Canada is “woefully short” in meeting these needs.

“The bottom line is Canadians need federal and provincial action for better, more reliable charging infrastructure and supports for purchasing zero emission vehicles in every sector of the market,” he said.

David Adams, CEO of Global Automakers of Canada, said there was “no turning back” on the mandate, noting that global automakers have invested $1.3 trillion in the transition to electrified vehicles.