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Oh those EVs

22 Jan 2025 | News Roundup

Just in time for incoming President Trump to cancel the American EV sales mandate, thus making all our battery plant subsidies good and worthless, the Canadian government suddenly and unexpectedly “paused” its iZEV program. Which stands for Incentives for Zero-Emission Vehicles with the initial “i” being lower-case because that was cool and hip when somebody was young 30 years ago. And in case you’re not among the EV makers and sellers gaping in horror, it’s a subsidy of up to $5k per EV car, being ended on March 31 as previously announced or sooner if the cash runs out, which it apparently will after about 14,000 more purchases which may take a while. Although the Trudeau administration hasn’t repealed our own sales mandate, apparently nobody expected the government to keep a promise of pretty much any sort, let alone one that runs so contrary to its climate dogmatism and penchant for spewing a hurricane of free money. So, to review the bidding, the Canadian government is no longer subsidizing consumer purchases of EVs but is still requiring us to buy them from companies who scored billions in subsidies to make unwanted batteries for a market that just vanished.

Columnist Lorrie Goldstein kicked off his evisceration of the decision with:

“Prime Minister Justin Trudeau posted a self-congratulatory video on X last year, boasting that his Liberal government ‘bet big on electric vehicles’ and ‘now that industry is betting on us.’ The problem is that bet has come up snake eyes for Canadian taxpayers.”

But what of the industry?

We’re no fans of any vested interest claiming subsidies in the national interest because it can’t make it on sales to voluntary buyers. (Do you hear us, CBC?) We don’t have much sympathy for the CEO of Electric Mobility Canada, either in general terms or over his plaint that:

“Our dealers are stunned. Some of these vehicles are on the container ships right now for delivery just as the rebates are expiring. It’s a mess.”

And not just because the rebates aren’t expiring now, they’re expiring at the end of March. Or sooner; as Blacklock’s Reporter added:

“Cabinet gave no reason for the expiry of rebates under a program launched in 2019. Electric Mobility calculated some $71.8 million remains in the rebate program, enough for about 14,000 new buyers.”

We do have some sympathy for the CEO, Daniel Breton, over the illogic of the decision if not the supposed unpredictability of actually doing what you said even if you normally don’t:

“If they want to have sales targets that are more and more ambitious, it makes no sense to get rid of the rebates. To me it is about policy predictability. You cannot plan like this. It doesn’t work.”

But the big problem is that his hat is out and we say in the spirit of Adam Smith it should go back in:

“He noted dealers shipped unsold cars out of Ontario after the province’s 2018 cancellation of its Electric And Hydrogen Vehicle Incentive Program that paid rebates up to $14,000. ‘It was a disaster,’ he said. ‘Sales went down 80 percent.’”

Because they were, at bottom, sales to government dogmatists not customers willing to pay what the things cost.

In this regard we want to applaud the Canadian Vehicle Manufacturers’ Association for saying with this decision and the “failure to build adequate public charging infrastructure” in this country, “the federal government’s mandated ZEV sales targets are increasingly unrealistic and must end.”

Whether adequate public charging infrastructure would have changed the picture even if the Canadian government had unexpectedly shown itself capable of building it, anyone in the car business might reasonably have concluded that the government was going to make EVs profitable no matter what mere consumers thought. So the firms invested, hired and planned around an endless flow of free money. And suddenly reality hit.

Of course one counter-argument is that with the countless billions the auto sector has received from the federal and various provincial governments they should be able to turn a profit without that paltry subsidy. Another is that if the government actually bans internal combustion engines those wretched consumers will be like lobsters in an EV pot and will buy them regardless. But people can just not buy cars, and keep the ol’ beater running or get around some other way or stay home.

On the question of whether a new administration might change that policy too, the reliably firm-but-flexible Conservative leader Pierre Poilievre said in a 2023 radio interview that “Of course if these cars were affordable you wouldn’t need a mandate” and that:

“I think what we need are smart regulations to improve fuel efficiency gradually, year after year. That will save money for consumers while protecting the environment and over time we get to a point where we have close to zero emissions in our automobiles through various types of technology.”

Various types. Technology. How cool is that? And how vague?

Until the flying zero-emissions cars self-drive onto lots, the feds still ostensibly intend that at least 20% of all new passenger cars sold in Canada will be EVs in 2026, 60% in 2030 and 100% in 2035. But actual sales figures make a mockery of those green dreams. And the Parliamentary Budget Officer, whose job is to do math for MPs who lack sufficient staff to keep abreast of issues themselves, says EV prices would have to drop by 31% to get to 60% of sales by 2030.

We think it’s mumbo jumbo. EV prices could fall by half and half of us wouldn’t buy them because we don’t like them because they don’t work very well except for traveling without a big load in an urban area in good weather, and most of Canada isn’t that kind of a place.

6 comments on “Oh those EVs”

  1. As with all things Green, the visible EV subsidies at retail are only the tip of the iceberg. Manufacturers "carbon credit" transfers from nearly profitable IC business to losing EVs are never shown, the roads paid for by fossil fuel taxes are free for EV owners who now demand that convenient EV charging stations to be paid for by taxpayers who already paid for the gas stations they are supposed to replace. Hidden in the cost of "motor fuel", actually gasoline diluted with low energy ethanol (nearly half, heavily subsidized corn product imported from the US) are the taxes and other special formulation costs to make it more virtuous. Dispensed from pumps (calibrated and temp compensated for ultra precision) it "may contain up to 10%" federally mandated ethanol. Your mileage may vary.
    Apparently the lower orders, especially the 75% who can only afford to buy used, including the multi-recycled beaters for those struggling to remain in or join the tax paying classes, are just collateral damage, should give up autonomous personal transportation and go public. Alas, lower fuel tax subsidies from higher efficiency IC vehicles and none from EV drivers has put municipal transit budgets in peril. Revolutions don't come cheap.

  2. Reality eventually catches up with technological and economic Jacobins and Bolsheviks. For the urban commuters in a nation without tariffs, Chinese EVs at around C$15,000, don't need subsidies. You know, "competitive advantage" where they buy our commodities and we refrain from subsidizing what we can't possibly compete in.

  3. Typical automobile engines have a thermal efficiency of about 30%, so that about 70% of the heat generated by combusting gasoline goes out the tail pipe without being converted into useful mechanical energy. It is possible to bring thermal efficiency up to 50% or more but the result tends to be described as Formula One and isn't street legal. However, there is scope for a lot of improvement in internal combustion engine efficiency. If governments are really concerned with reducing CO2 emissions they would do better to stop throwing scads of money at EVs and spend some of it on advanced ICE research.

  4. Here’s a thought, how about an actually conservative political party for Canada, one that doesn’t think any government mandate is required and allow consumers to vote with their money on how efficient they want their vehicles?

  5. In fairness to Firm & Flexible Pierre Poilievre, politicians cannot predict what future technologies will be, but we do know that there will be market-driven ICE technology improvements (if politicians don't screw that up, too).

    My current 2014 (already 10 years old) 1,4 liter 122 bhp VW Golf does slightly better average mileage, with astronomically better acelleration, almost three times the top speed, much more room, much greater comfort and safety, much more quiet, much more reliable and with much lower HC and NOx emissions than my 1955 0,4 liter 13 bhp Lloyd. That sort of efficiency they didn't even dream about 70 years ago - and the Golf isn't even a diesel.

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