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Do Electric Vehicle Subsidies Work?

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From The Audit

Governments in Canada have been begging us to purchase EVs and plug-in hybrids for years. The carrot has been $600 million annually in federal subsidies (and more at the provincial level) aimed at consumers. The stick is the dark threat of outlawing internal combustion engines altogether. A third approach involves splashing billions of dollars of handouts and tax credits in the general direction of companies with starry-eyed plans to manufacture EV components locally.

I’m not going to discuss whether EVs are actually the best solution for whatever ails the environment. That may be a few levels above my pay grade. Instead, I’d like to analyze whether the consumer-focused subsidies actually worked.

To do that I first identified the provinces that offered subsidies for “battery electric vehicles” (i.e., EVs). Those would be British Columbia, Quebec, New Brunswick, Prince Edward Island, Nova Scotia, and Newfoundland. That’ll give us a nice reference point for comparison against provinces that don’t offer subsidies. Specifically, those are Alberta, Saskatchewan, Manitoba, and Ontario. (Although Manitoba did just introduce a rebate program in July of 2024.)

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Of course, there are also federal subsidies available across the country.

Now there is one problem with the Statistics Canada sales data. Due to some weird licensing issue, there’s no sales data at all for Newfoundland, Nova Scotia, or Alberta. We’ll just have to do our best with what we’ve got.

Here are the numbers expressed as sales per 100,000 people (based on 2024 provincial population estimates):

The obvious big mover here is Quebec. Their Roulez Vert program – at $7,000 – is the most generous in the country (although it’s currently set to be phased-out by 2027). But Roulez Vert has been around since 2012, so it might not completely explain those huge jumps since 2022.

If you squint really hard at the graph, you should notice a modest jump in Ontario EV sales back in 2018. That would probably be due to last-minute bargain hunters reacting to the Ford government’s plans to cancel Ontario’s rebate.

But none of that is going to give us the precision we need to answer our real question: did government subsidies actually drive more EV sales? For that, we’ll need a bit of statistical analysis. This scatter plot visualizes the relationships between subsidies and average sales over time:

If our only data point was Quebec – with its impressive sales and high subsidy level – then the conclusion would be straightforward. But that’s exactly why we look for more data. So, for instance, BC has sales that, proportionally, were close to Quebec’s but with rebates that were 40 percent lower. And Canada’s federal rebates played a role in relatively few overall sales.

For those of you who enjoy such things, here are the actual numbers SciPy’s linear regression gave me:

Slope: 0.005910745672259122
Intercept: 13.256019105900187
R-squared: 0.31881294222441453
P-value: 0.14480378835260208
Standard Error: 0.00352721449117312

The slope indicates that for every additional thousand dollars of subsidy, EV sales would increase by only around six vehicles per 100,000 people. That’s compared with the intercept (13.26) which estimates the baseline (no-subsidy) sales at 13.26 units per 100,000 people.

The R-squared value suggests that about 32 percent of the variability in EV sales per 100,000 people is explained by the subsidy amount. But the P-value strongly suggests that the relationship is not statistically significant.

Meaning, in other words, that there’s no clear cause-and-effect relationship between the billions of dollars of government handouts and real-world vehicle sales. It’s distinctly possible that just as many EVs would have been purchased had there been no subsidies.

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The high price of green virtue

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Macdonald-Laurier Institute

By Jerome Gessaroli for Inside Policy

Reducing transportation emissions is a worthy goal, but policy must be guided by evidence, not ideology.

In the next few years, the average new vehicle in British Columbia could reach $80,000, not because of inflation, but largely because of provincial and federal climate policy. By forcing zero-emission-vehicle (ZEV) targets faster than the market can afford, both governments risk turning climate ambition into an affordability crisis.

EVs are part of the solution, but mandates that outpace market acceptance risk creating real-world challenges, ranging from cold-weather travel to sparse rural charging to the cost and inconvenience for drivers without home charging. As Victoria and Ottawa review their ZEV policies, the goal is to match ambition with evidence.

Introduced in 2019, BC’s mandate was meant to accelerate electrification and cut emissions from light-duty vehicles. In 2023, however, it became far more stringent, setting the most aggressive ZEV targets in North America. What began as a plan to boost ZEV adoption has now become policy orthodoxy. By 2030, automakers must ensure that 90 per cent of new light-duty vehicles sold in BC are zero-emission, regardless of what consumers want or can afford. The evidence suggests this approach is out of step with market realities.

The province isn’t alone in pursuing EV mandates, but its pace is unmatched. British Columbia, Quebec, and the federal government are the only ones in Canada with such rules. BC’s targets rise much faster than California’s, the jurisdiction that usually sets the bar on green-vehicle policy, though all have the same goal of making every new vehicle zero-emission by 2035.

According to Canadian Black Book, 2025 model EVs are about $17,800 more expensive than gas-powered vehicles. However, ever since Ottawa and BC removed EV purchase incentives, sales have fallen and have not yet recovered. Actual demand in BC sits near 16 per cent of new vehicle sales, well below the 26 per cent mandate for 2026. To close that gap, automakers may have to pay steep penalties or cut back on gas-vehicle sales to meet government goals.

The mandate also allows domestic automakers to meet their targets by purchasing credits from companies, such as Tesla, which hold surplus credits, transferring millions of dollars out of the country simply to comply with provincial rules. But even that workaround is not sustainable. As both federal and provincial mandates tighten, credit supplies will shrink and costs will rise, leaving automakers more likely to limit gas-vehicle sales.

It may be climate policy in intent, but in reality, it acts like a luxury tax on mobility. Higher new-vehicle prices are pushing consumers toward used cars, inflating second-hand prices, and keeping older, higher-emitting vehicles on the road longer. Lower-income and rural households are hit hardest, a perverse outcome for a policy meant to reduce emissions.

Infrastructure is another obstacle. Charging-station expansion and grid upgrades remain far behind what is needed to support mass electrification. Estimates suggest powering BC’s future EV fleet alone could require the electricity output of almost two additional Site C dams by 2040. In rural and northern regions, where distances are long and winters are harsh, drivers are understandably reluctant to switch. Beyond infrastructure, changing market and policy conditions now pose additional risks to Canada’s EV goals.

Major automakers have delayed or cancelled new EV models and battery-plant investments. The United States has scaled back or reversed federal and state EV targets and reoriented subsidies toward domestic manufacturing. These shifts are likely to slow EV model availability and investment across North America, pushing both British Columbia and Ottawa to reconsider how realistic their own targets are in more challenging market conditions.

Meanwhile, many Canadians are feeling the strain of record living costs. Recent polling by Abacus Data and  Ipsos shows that most Canadians view rising living costs as the country’s most pressing challenge, with many saying the situation is worsening. In that climate, pressing ahead with aggressive mandates despite affordability concerns appears driven more by green ideology than by evidence. Consumers are not rejecting EVs. They are rejecting unrealistic timelines and unaffordable expectations.

Reducing transportation emissions is a worthy goal, but policy must be guided by evidence, not ideology. When targets become detached from real-world conditions, ideology replaces judgment. Pushing too hard risks backlash that can undo the very progress we are trying to achieve.

Neither British Columbia nor the federal government needs to abandon its clean-transportation objectives, but both need to adjust them. That means setting targets that match realistic adoption rates, as EVs become more affordable and capable, and allowing more flexible compliance based on emissions reductions rather than vehicle type. In simple terms, the goal should be cutting emissions, not forcing people to buy a specific type of car. These steps would align ambition with reality and ensure that environmental progress strengthens, rather than undermines, public trust.

With both Ottawa and Victoria reviewing their EV mandates, their next moves will show whether Canadian climate policy is driven by evidence or by ideology. Adjusting targets to reflect real-world affordability and adoption rates would signal pragmatism and strengthen public trust in the country’s clean-energy transition.


Jerome Gessaroli is a senior fellow at the Macdonald-Laurier Institute and leads the Sound Economic Policy Project at the BC Institute of British Columbia

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Elon Musk Poised To Become World’s First Trillionaire After Shareholder Vote

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From the Daily Caller News Foundation

By Mariane Angela

Tesla shareholders voted Thursday to approve an enormous compensation package that could make Elon Musk the world’s first trillionaire.

At Tesla’s Austin headquarters, investors backed Musk’s 12-step plan that ties his potential trillion-dollar payout to a series of aggressive financial and operational milestones, including raising the company’s valuation from roughly $1.4 trillion to $8.5 trillion and selling one million humanoid robots within a decade. Musk hailed the outcome as a turning point for Tesla’s future.

“What we’re about to embark upon is not merely a new chapter of the future of Tesla but a whole new book,” Musk said, as The New York Times reported.

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The decision cements investor confidence in Musk’s “moonshot” management style and reinforces the belief that Tesla’s success depends heavily on its founder and his leadership.

“Those who claim the plan is ‘too large’ ignore the scale of ambition that has historically defined Tesla’s trajectory,” the Florida State Board of Administration said in a securities filing describing why it voted for Mr. Musk’s pay plan. “A company that went from near bankruptcy to global leadership in E.V.s and clean energy under similar frameworks has earned the right to use incentive models that reward moonshot performance.”

Investors like Ark Invest CEO Cathie Wood defended Tesla’s decision, saying the plan aligns shareholder rewards with company performance.

“I do not understand why investors are voting against Elon’s pay package when they and their clients would benefit enormously if he and his incredible team meet such high goals,” Wood wrote on X.

Norway’s sovereign wealth fund, Norges Bank Investment Management — one of Tesla’s largest shareholders — broke ranks, however, and voted against the pay plan, saying that the package was excessive.

“While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk,” the firm said.

The vote comes months after Musk wrapped up his short-lived government role under President Donald Trump. In February, Musk and his Department of Government Efficiency (DOGE) team sparked a firestorm when they announced plans to eliminate the U.S. Agency for International Development, drawing backlash from Democrats and prompting protests targeting Musk and his companies, including Tesla.

Back in May, Musk announced that his “scheduled time” leading DOGE had ended.

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