As part of the program, the federal government allocated C$300 million to incentivize the purchase of zero emission vehicles.
In the release, Transport Canada estimated that 14,000 EVs have been sold since the initiative began. The rebate initiative was introduced by the Canadian federal government because of its commitment to climate change and investing in efforts to improve air conditions.
As part of the program, the federal government allocated C$300 million in its 2019 budget to incentivize individuals to purchase zero-emission vehicles. The program is designed to take place over three years for vehicles that are priced under C$45,000.
“Over the past three months, the Incentives for Zero-Emission Vehicles (iZEV) program have made it easier for Canadians to be part of the solution to climate change while reducing their daily driving costs,” said Marc Garneau, minister of transport, in a statement.
Year-to date, Electric Mobility Canada reports that EV sales in Canada have increased by 30 percent compared to the same time period last year.
The federal rebate program, iZEV, lists more than 25 EVs that are eligible for the program, a list that includes battery-powered, hydrogen fuel cell and plug-in hybrid electric vehicles. Tesla’s (NASDAQ:TSLA) Model 3, Toyota’s (NYSE:TM) Prius and Kia (KRX:0000270) models were among the eligible vehicles.
Working in tandem with EV incentive programs are provinces such as British Columbia and Quebec. The joint rebate program can result in as much as C$11,000 in combined deductions in British Columbia and C$13,000 in Quebec at the point of sale purchase.
According to Electric Mobility Canada, the rebate programs are notably effective. In British Columbia, there was a 100 percent increase in EV sales during the first quarter of 2019. However, the trend in Ontario offers a stark contrast. After the EV incentive in the province was cut last year, sales have dampened, resulting in a 50 percent decline in EV sales in the first quarter of 2019.
BC’s rebate program spans as far back as 2011, while Ontario and Quebec launched their equivalent programs in 2011 and 2012, respectively.
In line with this, since the rebate program began in May, 36,000 tonnes of GHG emissions will be prevented from being released into the air next year as a result of the EV purchases, Transport Canada said.
Overall, the rebate program is working to create sustainable and cleaner living conditions for Canadians in the long-term. Transport Canada states that traditional vehicle emissions account for 25 percent of total carbon pollution in Canada, while EVs offer a proactive alternative solution. By 2025, Transport Canada aims to have EVs account for 10 percent of total light-duty vehicle sales. The federal government hopes to achieve 100 percent of total sales to come from EVs by 2040.
As policies come into effect, consumer behavior has shown signs of change. The Bank of Canada published a report on the EV market, stating that, in 2017, EVs accounted for 1 percent of new car sales. Last year, this doubled to 2 percent, according to Navigant Research, while the share of EV sales in both Quebec and British Columbia surpassed 3 percent.
As momentum continues in the Canadian EV market, Electrical Industry Canada projects that as many as 91,000 plug-in electrical vehicles will be sold by 2024.
On a global level, the International Energy Agency (IEA) says that policies play a pivotal role for the EV industry through incentivizing EV sales and building charging infrastructure.
The advanced development of battery technology will, too, help the adoption, it states. These two pillars, in addition to evidence of a positive uptake from the private sector, are driving adoption rates. The IEA projects that 23 million EV sales will take place by 2030.
Don’t forget to follow us @INN_Technology for real-time news updates.
Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.