Ontario's Updated EV Incentives Inconsistent
As of February 2016 Ontario's updated EV incentive program offered increased incentives for electric vehicle purchases. I've been hoping there would be a statement clarifying how vehicles qualify for higher rebates, but they have yet to release one. From MTO's guide, this is how it works:
* Vehicles with a battery capacity from 5 to 16 kWh are eligible for incentives between $6,000 and $10,000 based on the battery capacity of the vehicle.
* Vehicles with battery capacity of larger than 16 kWh are also eligible for an additional $3,000 incentive
* Vehicles with five seats or more are eligible for an additional $1,000.
* Vehicles between $75,000 and $150,000 have an incentive cap of $3,000.
* Vehicles over $150,000 do not qualify.
These changes are fantastic and help clarify the intention of the incentive compared to the previous iteration. Based on this the maximum incentive would be $14,000. $10,000 + $3,000 for an EV with 30 kWh battery capacity + $1,000 for the fifth seat totaling $14,000.
The incentive program is in place to promote adoption of electric vehicles by removing the burden of price premiums for the new technology. The assumption being that as EVs become more prevalent and established, the cost of ownership will decrease to a competitive price point. The following points don't seem to align with this goal.
The Price Ceiling is Too High.
Removing incentive eligibility at $75,000 might have been better than capping the total payable to $3,000. Mass adoption of electric vehicles will need the average income resident to buy in to the technology. This person is not considering a vehicle in the $75,000+ price bracket. At $75,000 you could be buying a well equipped Porsche Boxter or Cayenne which most people would not consider pulling into their driveways. Subsidizing anything more expensive than that is a bit silly. Even if people were considering a vehicle in the $75-150 thousand price range, $3,000 is not going to be a deciding factor to go electric.
Promoting Low Battery Capacity
A 5 kWh battery will not take you very far and should not be subsidized as it will not replace a conventional vehicle. Additionally, while the government is not formally endorsing any vehicles with this battery capacity, in effect the government is telling its citizens that a 5 kWh battery is enough. Enough that it's willing to send you a cheque for $6,000 if you buy one. This type of promotion will only lead to people having bad experiences with electric vehicles, costing taxpayer money with no return on investment, and confusing the public (like me) as to what the intentions of the incentive program really are.
Much more appropriate would be $500 to $15,000 for battery capacity between 10 kWh to 90 kWh. 10 kWh would recognize that plug in hybrids are an improvement over the ICE, but that it is not our end goal. The high end would recognize that we want electric vehicles to replace their gasoline counterparts and 90 kWh will likely be required to do that, especially in northern communities. As there are no 90 kWh vehicles available in the incentive's price range, this would encourage manufacturers to consider this for their future vehicles.
Incentive is Not to Exceed 30% of the MSRP
After the key points, they add this one in: "Total value of the incentives cannot exceed 30% of MSRP". Really? This one is the most mind blowing. We will cover $14,000 if your car costs $46,700 to 75,000. But if the manufacturer does a good job bringing the base model of their electric car to $30,000 you can only have $9,000 in rebates. I thought the goal was to put more electric vehicles on the street? If the cost to me is the same, why wouldn't I encourage manufacturers to make their vehicles cheaper by providing the them with the same incentive as we are for the more expensive vehicles. The cheaper these electric cars are, the more sacrifices in convenience people will be willing to make in order to drive one.
See below for how this 30% maximum has a really weird effect on how we end up providing more money for expensive vehicles, or PHEVs over cheaper BEVs.
2016 Nissan Leaf S, BEV
24 kWh Battery Capacity
2016 Kia Soul EV, BEV
27 kWh Battery Capacity
2016 BMW i3, BEV
22 kWh Battery Capacity
2016 Cadillac ELR, PHEV
17.1 kWh Battery Capacity
MSRP I don't know, I couldn't find it at any dealers in my area.
2016 Chevy Volt Hatchback VLT, PHEV
18.4 kWh Battery Capacity
The Nissan Leaf and Kia Soul EV both have larger batteries than the other 3 listed and have more seating, but since they have a lower price tag, they do not receive the incentive. Instead, vehicles that are able to burn gasoline are favoured under this updated electric vehicle incentive program since they are more expensive. Note that no vehicle has qualified for the $14,000 incentive and the only 3 vehicles eligible for $13,000 incentive are the i3 and i3 ReX, ELR, and Volt. The base model i3 is the only BEV of the group.
This incentive program is absolutely critical if we want to increase the rate of EV adoption, but it needs some serious work.