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Are rebates for electric cars a smart use of money?

I’m not much of a political animal and tend to stay clear of discussions on how to spend the public money.

I’m not much of a political animal and tend to stay clear of discussions on how to spend the public money.


The obvious exception, of course, is when it directly concerns moi. For example, I would totally raise my voice in favour of subsidizes to encourage more vinyl re-issues of early 1970s arena rock.


Even though we’re not currently looking to add a vehicle to our family fleet, I’m still completely drawn into the discussion of whether governments should offer rebates to customers wishing to purchase electric (EV) and/or ‘plug in’ hybrid (PHEV) vehicles.


The discussion ramped up recently, because come July 1, 2010 (yes, Canada Day), several provinces (Ontario, B.C. and P.E.I.) will no longer offer rebates toward purchases of “regular” hybrids. This was brought on because their current programs were based on rebating provincial sales tax (PST), and the HST replaces the PST in those provinces starting Canada Day.


We have yet to hear how most provinces will change their green car rebates moving forward, but we sure did hear from Ontario.


It introduces what just might be the largest electric car rebate — up to $8,500 — of any jurisdiction in the world.


“The maximum benefit of $8,500 exceeds similar electric vehicle rebates from the U.S., Quebec or upcoming U.K. programs,” noted Ontario MTO spokesperson Bob Nichols. “The Ontario program is designed to be a point of purchase incentive; many other jurisdictions, including Quebec and the U.S. are income-tax based programs. We feel that reducing the price differential of these new vehicles from conventional vehicles at the point of purchase will encourage more consumers to adopt this strategy.”


Well, it certainly won’t discourage people from buying EVs and PHEVs, but is this the right strategy for greening the fleet, stimulating domestic EV manufacturing, and a good use of public money? Unfortunately, the answer to those questions can only come in the fullness of time.


There are great arguments, both for and against green rebates, but the one that keeps gnawing at me the most is that automakers are already committed to building these vehicles. I’m sure they haven’t planned on letting them go unsold on dealer lots, or watching their competition walk away with this new, emerging market.


Let them compete, I say, against all other EVs and PHEVs, and against all other types of vehicles, and let the best team win. Or maybe I’m watching too much World Cup soccer at the moment.



The Rebate Debate

For green rebates



  • Raises profile of green cause

  • Accelerates greening of the fleet

  • Incentive for more, and quicker, automaker involvement



Against green rebates



  • Funds better served somewhere else

  • Prematurely anoints electric as top green prospect

  • Initial production of EV and PHEVs already virtually sold out



Michael Goetz has been writing about cars and editing automotive publications for over 20 years. He lives in Toronto with his family and a neglected 1967 Jaguar E-type.