Electric vehicles: the discounts have been less expensive than the penalty reported

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For some time, some stakeholders in the media argue that the discount on the purchase of electric vehicles have been too expensive to the State as well in money as in the cost per tonne of greenhouse gas (GHG) emissions.

What is it really?

Let us make the point.


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Why support the electrification of transport?

For several reasons, including, according to the government :

– participate in the fight against climate change, including reducing emissions of greenhouse gases;
– reduce energy dependence on oil and thus improve the trade balance of Québec;

Knowing that:

– the first source of GHG emissions in Quebec is the transport sector with 43% of total emissions in 2016;
– GHG emissions from road transport have increased by 52.3% between 1990 and 2016;

It is essential that we find ways to reduce our GHG emissions in road transport.

However, the transition from gas-guzzlers to fuel efficient vehicles and electric, and they do not constitute THE solution, is part of solutions to be implemented to reduce in a concrete way our GHG emissions in road transport.

Where the solution of the bonus-malus.


The bonus-malus

To accelerate this transition, some countries have implemented bonus-malus. This are programs where a government is encouraging the transition to less polluting vehicles through, on the one hand, financial incentives to purchase vehicles that emit little or no GHG emissions and, on the other, additional costs to the purchase of vehicles that emit a lot of GHG. Countries such as France, Belgium, Norway, Sweden etc have implemented various versions of bonus-malus.

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However, Quebec has also its own programs of bonus and malus, but they are not connected one to the other… for the moment.


The bonus has cost$ 252 Million to the government

Between the beginning of the year 2012 (the beginning of the program Drive Electric) and December 31, 2018, the government of Quebec has contributed approximately$ 252 Million in discount (bonus) for the purchase and rental of vehicles partially or fully-electric, new and used, as well as for the purchase and installation of charging stations.

The malus has reported a minimum of 467 M$ to the government

For its part, the Société de l’assurance automobile du Québec (SAAQ) collects a registration fee additional (and a right of acquisition from 2016) for vehicles of high capacity in order to strengthen the objective of reducing vehicle emissions and greenhouse gas emissions”. This is the malus.

However, these samples were reported to the government of Quebec a minimum of 467 M$ between the years 2012-2013 and 2017-2018. The majority of these are currently redirected to the Société de financement des Infrastructures locales du Québec (SOFIL) for projects of local roads, wastewater, public transit and various infrastructures.

As you can see, the penalty to the registration of vehicles of high capacity has been reported a lot more money to the government that the bonus to the purchase of electric vehicles has cost him since the beginning of the program, Drive Electric.

The Association of Electric Vehicles Quebec (AVÉQ) calls now for a “connection” between this bonus and the penalty. According to Simon-Pierre Rioux of the AVÉQ, “by linking the bonus to the penalty, the bonus awarded to the electric vehicles can be financed by the penalty to the registration and the new government of Quebec will make the process of financing and management of the two programs more efficient and transparent”.

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Once we understood this, we can conclude that :

– these rebates can, and should, stay as they are helping to accelerate the transition to electric vehicles, new and used;
– the penalty will be enhanced because they are still too low to discourage the purchase of fuel-inefficient vehicles

Otherwise, we will never achieve our goals of GHG reductions.

And for those who worry about the impact of the penalty on the finances of people who need larger vehicles for their work, be aware that there are already exemptions to the program for the save.