Quebec’s electric car sales quota will increase the cost of conventional vehicles by $1,100 CAD, predicts a ‘Viewpoint’ report published by the Montreal Economic Institute (MEI).
The report, prepared by senior associate researcher German Belzile, argues that this ultimately makes the new quota a “tax in disguise” for consumers.
The MEI isn’t the only group to critique the new policy under Bill 104, which requires that as of the 2018 model year, 3.5 percent of vehicles sold in Quebec must be electric or plug-in hybrids, with any manufacturers that fail to achieve this goal receiving a financial penalty.
The quota is set to reach 22 percent by 2025.
The rules are being put in place in order to help the province achieve its goal of having 100,000 electric or hybrid vehicles on provincial roads by 2020 and one million by 2030, but Belzile states in a recent press release that the policy is too aggressive.
“It is likely that carmakers will fall short of these targets, especially since the quota of 3.5% for 2018 is above the present share of total motor vehicle sales that are electrics and hybrids, which stands at 1.08%.”
“There’s only two ways to recoup your costs: A is you absorb them, or B is you pass them on to the consumer.”
He says the new policy will push manufacturers to raise prices on conventional cars in order to make back their loss. In his report, Belzile predicts that the increase in the marginal cost of conventional cars will be $175 in 2018, but as the quota increases to 22 percent by 2025, the extra cost will increase to $1,100 per vehicle.
John White, president and CEO of the Canadian Dealers Association, agrees with Belzile’s criticism, telling the Montreal Gazette: “There’s only two ways to recoup your costs: A is you absorb them, or B is you pass them on to the consumer. And you pass them on to the consumer through the rest of your product portfolio.”
But the office of Environment Minister David Heurtel issued a statement defending the policy.
The government stated that in U.S. states that have similar mandates for zero-emissions vehicles, there has been no increase in the price of other vehicles, and noted that Quebec allows the sale of pre-owned electric vehicles to count for manufacturers’ quotas.
Quebec is no stranger to introducing notable electric vehicle initiatives. It currently offers purchasing and leasing rebates for electric cars, and a rebate for the installation of a home charging station.
The province also recently considered mandating that all new houses be built with a 240V charging port.