EV sales have been heavily dependent on “early adopters” and significant government rebates. Now most early adopters have made their purchases, and the government rebates have been reduced or cancelled…bang…reality hits.

After almost 5 years and close to $3 Billion in expenditures, the Federal Government paused its EV rebate program in January this year, two months before the scheduled expiry date of end March. The program had run out of money.

Rebate to consumers

Note, this EV rebate program, Transport Canada Incentives for Zero-Emission Vehicles (iZEV), is only the rebate to consumers that reduces the retail price of the vehicle. One Government department, Transport Canada, spent close to $3 Billion just on retail rebates. Another Government department, Natural Resources Canada, under its Zero Emission Vehicle Infrastructure Program, provides subsidies for the installation of EV charging stations. $265.9 million in funding for 353 projects for charging infrastructure was provided between June 2019 and July 2023.

In addition, there are subsidies for battery plants, plus subsidies to manufacturers for retooling to build EVs or new plants to build EVs. On top of these Federal subsidies and rebates, there have also been Provincial subsidies and rebates. These multiple streams of money paid out to the EV vertical add up to a huge total…many, many Billions of dollars.

Misleading sales tool

Rebates are a dangerous and misleading sales tool. They generate increased “demand” for a product by improving its value proposition to the market. However, this is false demand as the market does not see value in the regular price, and the moment the rebate stops, the sales collapse. Voila, rebates stop, and EV demand has dropped significantly.

The EV vertical is resting on a foundation of subsidies and rebates. This is multiple Billions of dollars from the government purse…the pocket of every taxpayer.

Any business heavily dependent on government subsidies to survive and grow has a viability issue in the real market, especially when it requires subsidies for long periods beyond the initial start-up phase. The EV vertical has been dependent on forced financial support from consumers who do not want to buy the product. Even the consumer who lives in the city and takes public transit is paying for this EV fantasy.

Despite Billions in rebates and subsidies, EV market share is not growing fast enough. Now 2026 is approaching, even the industry that has benefitted from the Billions in taxpayer money is now saying the 2026 targets are unrealistic and unattainable.

Point to ponder. No fuel marketing company receives subsidies to build a gas station. Gas stations must be viable based on real consumer demand for fuel. They provide a product consumers want in sufficient volumes to produce a positive ROI.

Deception of market share

In 2024, Zero Emissions Vehicles (ZEVs) achieved a 15.4% market share based on Government ZEV classifications. Included in Government ZEV classifications are Plug-In Hybrid Vehicles (PHEVs). The best-selling PHEV in Canada is the mid-market priced Mitsubishi Outlander PHEV with a maximum rated battery range of 61 km. In winter’s below zero temperatures, this range could be reduced by 30% or more. In reality, many people will use the ICE powerplant in this vehicle for more than 50% of their driving. PHEVs are only classified as ZEVs to make the market share numbers look better. A big deception and it begs the question; what other deceptions exist?

Canada produces less than 2% of Global Greenhouse Gas Emissions (GHG). China produces the equivalent of Canada’s annual GHG in less than 21 days. Why are we spending Billions and adding to the already outlandish deficit, attempting to achieve a target that will have virtually zero effect on the global climate?

For too long we have allowed the Government to spend Billions putting lipstick on a pig. Some believed the pig was getting more attractive. However, it is time to leave the fantasy world and see the pig for what it really is.