Ontario shuts down EV rebate just as Tesla Model 3 was blowing it up

As the Conservative party is officially talking over the Ontario government, they announced that they are officially shutting down the province’s generous electric vehicle rebate program effective immediately.

The move comes after Tesla’s ramp-up of Model 3 deliveries in the province have blown up the program, but many reservation holders will not have access to it.

In the first quarter 2018, fewer than 1,000 all-electric vehicles were delivered in Ontario.

In April, the government added the Model 3 to the list of eligible vehicles for the CA$14,000 incentive.

The discount had a big impact on the price of the vehicle and Tesla started delivering the Model 3 with shipments of hundreds of vehicles in the following weeks.

Some reservation holders were worried that the window to get the discount would be fairly short because the leader of the Conservative party, Doug Ford, who was polling ahead in the upcoming election, made comments about getting rid of the program.

The fear was warranted because after winning the election and now officially taking over the government, they have officially killed the electric vehicle rebate program.

The logic behind it is that the EV rebate was financed by the cap-and-trade program and they want to eliminate the cap-and-trade program to save money in order to bring gas prices down by 10 cents a litre.

It means that they are literally killing a program aimed to accelerate EV adoption in order to reduce the price of gasoline, which would result in more people using gasoline.

Here’s the full press release:

Ontario Ends the Electric and Hydrogen Vehicle and Charging Incentive Programs

July 11, 2018

On July 3, 2018, Ontario cancelled the cap and trade program as part of its commitment to bring gas prices down by 10 cents a litre and help reduce costs for Ontario families and businesses by $1.9 billion dollars per year.

Given the Electric and Hydrogen Vehicle Incentive Program and the Electric Vehicle Charging Incentive Programs are funded through cap-and-trade proceeds, these programs are cancelled.

Applications will be accepted from dealerships, car owners or prospective car owners only if one of the following conditions has been met:

• Eligible vehicles that have been delivered to consumers, registered, and plated on or before July 11 will receive the incentive.
• Inventory that dealers have on lots or orders made by dealerships with manufacturers on or before July 11, will also be honoured for the incentive provided that the vehicle is delivered to consumers, registered, and plated by September 10.

In addition, the Electric Vehicle Charging Incentive Program is cancelled effective July 11. Charging stations purchased and/or installed before this date will be eligible to receive incentives if the application is submitted within 60 days of July 11.

Electrek’s Take

That’s a bummer. Ontario was just starting to pull ahead of Quebec for EV adoption after years of domination by the Belle Province.

Now I presume that they will quickly lose the lead with this major setback.

I know that conservative often like to point out that an EV rebate is taxpayer money financing the purchase of fancy vehicles, which is true to a degree, but that’s not the right way to look at it.

If the cost of emissions from gas-powered cars is not properly accounted for then there’s an unpriced externality in the market that needs to be regulated.

In a perfect world, there would be a direct price to pay for the cost of emissions from polluting cars, but that price ends being paid by everyone who breathes air and who is affected by climate change.

For now and until there’s a carbon price, the EV rebate is the best short-term solution to accelerate EV adoption.

What do you guys think? Let us know in the comment section below.