This May, the federal government will start issuing a rebate up to $5,000 to people buying a new electric car. The program will cost Transport Canada $300 million, or roughly enough to provide 60,000 people with full $5,000 rebates on new EV (electric vehicle) purchases.
When Darren Fisher tweeted to promote the incentive last week using the hashtag #zeroemissions, many responded wondering what kind of incentive their bikes would get.
Great news! I need a new bicycles for the family and it will further encourage me to remain #emissionfree with my local travels.
Where do we apply for the cash incentive @DarrenFisherNS ?
— Kjipuktuk Safe Communities (@safe_hrm) April 18, 2019
By branding the program around the concept of “zero emission vehicles,” the federal government is deservedly getting some criticism from people who like to point out there is basically no such thing (though bikes do come pretty darn close).
If you read the explanatory material on the program, dubbed iZEV, you’ll see that the government is defining “zero emissions vehicles” as those with “the potential to produce no tailpipe emissions” (italics mine.) In other words, for the sake of marketing, we will overlook manufacturing and electrical generation emissions.
Okay, that’s fine. I don’t want to let semantics highjack the important conversation here: Are electric vehicles going to help us significantly reduce emissions on our way down to net-zero? And if so, will this incentive program work to transition us to electric vehicles faster?
First things first. Electric vehicles will definitely help us lower emissions, and will likely get us as close to zero emissions as a future with powered vehicles can get us.
The internet is full of people who firmly believe that electric vehicles actually have more emissions than their gas-powered counterparts. But in fact, while they produce slightly more emissions in manufacturing, they more than make up for this in operational emissions reductions, even with fossil fuel dependent electricity production.
The US-based Union of Concerned Scientists found in 2015 that EVs have on average half as many emissions over their lifetime compared to gas vehicles. You can read their report here, and watch their video here:
Of course, “half” is not “zero.” Getting closer to net-zero with cars means changing the way we manufacture them, and changing the way we produce electricity. That’s where beauty of EV infrastructure lies: any shift to renewable generation translates over immediately to the transportation sector.
So yes, electric vehicle drivers are still burning fossil fuels, and will continue to do so until we can convert our energy grid to renewables. But electric vehicles are far more energy efficient, and are not by design tied to fossil fuel consumption, like gas cars. The transition from gas cars to electric cars will mean immediate reductions in emissions, and the flexibility to pass on further reductions as we continue to convert our energy mix.
So, will this incentive help us get to that transition point?
In 2018, Canadians bought just over two million new cars, according to Statistics Canada. About 44,175 of those were battery electric and plug-in hybrid vehicles, according to Electric Mobility Canada, an industry-funded advocacy group. That’s only about 2% of the new cars purchased last year.
That’s a very tiny piece of a large pie, but it has been growing rapidly, with the population of EVs essentially doubling in Canada last year. And it has been growing most where there’s been consumer rebates in place. BC, Quebec, and Ontario accounted for over 96% of new electric car sales in 2018, with only 75% of the population. BC and Quebec still have incentives in place, which will now top up the federal incentive by another $5,000 and $8,000 respectively. Ontario’s rebate was the most generous, up to $14,000, but was abruptly ended last July by Doug Ford, along with planned support to help transit agencies test out electric buses, and the rest of the province’s climate strategy.
The rebate will not be available on luxury electric vehicles. Only cars with a base list price of $45,000, or $55,000 for larger vehicles, will be eligible. In other words, if you are in the market for a Tesla Model X 100D (clocking in north of $130,000) then this $5,000 grant is not for you. (Transport Canada has a list of eligible vehicles here.)
Presumably the price cap is to deter the program from subsidizing the very wealthy, and also to stimulate the sale (and therefore production) of lower-priced electric models.
The average price of a new car in Canada was $36,100 in 2018, based on Kelley Blue Book list prices. According to the prices collected by EV advocates Plug’n’Drive, the subsidy brings four EV models down to average price or below. Once you figure in four years of operating costs, there’s eight models that come in below the average.
Besides price, there’s also access to infrastructure which is affecting electric vehicle uptake. Halifax council’s Environment and Sustainability Committee will soon be seeing a report on how to increase availability of EV charging stations in the municipality. Currently, the station availability looks something like this:
Quite honestly it looks pretty good considering there were only 223 EVs in all of Nova Scotia at the end of 2018. As batteries get better range, rural communities will start to see EV infrastructure spread. Community transit provider Musgo Rider plans to install a charger at its location for public use (and eventual use with the EV they intend to buy to supplement their fleet).
Many an early EV adopter has complained online that it wasn’t “fair” that this federal rebate kicked in after they bought their electric car. But what those trailblazers miss is that this program is not aimed at them. This program is aimed at people for whom the upfront cost of an EV either appears to be or actually is too much (about $5,000 too much). Its goal is to increase demand long enough that the cost of EVs drops to match that of gas-powered cars. (Deloitte UK predicts that with the help of government incentives, EVs will reach cost parity with their gas powered relatives in three more years, by 2022.) It’s not a reward for citizens doing the “right thing”; it’s a carrot on a stick, hoping to lure more citizens into doing a certain thing.
That’s where some of the more reasonable concerns over incentivization of electric vehicle purchases comes in.
Todd Litman runs the Victoria Transport Policy Institute, where he writes reports like “Smart Transportation Emission Reduction Strategies.” Litman supports the development of electric vehicles because of their emissions and other pollution reducing potential. But he points out that “they provide few other community benefits.” In fact, they may even exacerbate other problems associated with driving, such as congestion, deaths, and injuries. Since they are cheaper to operate (more efficient and no fuel taxes), they run the risk of stimulating more driving.
“It’s justified to plant a seed,” says Litman. “So you’re accelerating the rate at which the industry shifts. That’s fine.” But, he says, “it is an awfully expensive intervention, and it only provides a couple of benefits.”
Litman favours an approach that achieves emissions reductions by helping curb the demand for car trips, instead of incentivizing a new technology. That way, we get a host of other benefits along with reduced emissions and less street level pollution.
To wrap up: EVs use a lot less energy than gas-powered cars, and produce half the emissions. And since we’ll need EVs as long as we still need cars, incentivizing their purchase until they cost the same as gas cars makes sense. But we also need to just generally use cars less, which will not only save us on emissions but also benefit us in other ways, like reduced injuries and congestion. So as we transition from gas to EVs, we need to make sure we don’t all end up driving around more.