Some automakers in Canada are announcing a $5,000 rebate on the purchase of an electric vehicle, in response to the elimination of the federal government’s iZEV EV incentives program.
Hyundai, Volkswagen and Nissan are acting in part because their Canadian dealers are now sitting on numbers of EVs in stock, which will be harder to sell quickly without the rebates.
The problem, as we've already alluded to, is that many dealers had stocked up on models in anticipation of the eventual end of the programs, in order to meet higher demand before they were withdrawn. They also needed to have enough models in stock to meet the authorities' quotas for electric vehicle sales.
The industry is in an uproar, however, because on the one hand, the government is forcing brands to sell a certain percentage of electric vehicles, while on the other, it is withdrawing the aid that helps them to meet their targets.
This is why a group of associations including manufacturers and dealers asked the federal government to end the mandates.
As for the $5,000 rebates offered by Hyundai, Volkswagen and Nissan, it's clear the companies are acting not just in their dealers’ interests, but also their customers’. The federal incentives were applied when the vehicle was registered, not before. Some consumers bought a model counting on a rebate, but the immediate shutdown of the federal program means that they won't benefit from any rebate at the time of delivery. Dealers are acting in good faith to respect their customers.
Will other manufacturers follow suit? It’s quite possible. We were told by a Kia Canada representative today that it has no plans at this point to offer such a discount. This afternoon, meanwhile, GM Canada announced it will offer the $5,000 discount on three of its all-electric models: the Chevrolet Equinox EV and Blazer EV, and the Cadillac Optiq. Others have yet to be heard from.
Of course, the discounts being offered are for a limited time. Beyond that, we could see price adjustments to make EVs more accessible for consumers.
Electrification is expensive. Some manufacturers are starting to make a profit with their electric vehicles, but not all, and it depends on a multitude of factors, including the electrification investments that are part of the equation.
We'll continue to keep a close eye on this issue. If you're in the market for an electric vehicle, be on the lookout for offers, manufacturer rebates, changes in interest rates - anything that might encourage you to buy one.
