Federal Government to Reimburse Car Dealers for EV Subsidies

Strategic Insights -

The federal government is taking steps to reimburse car dealers for electric vehicle subsidies they paid to customers before Ottawa shut down the program in January. The reimbursement process is expected to be announced to dealerships on Friday, with the aim of paying out all eligible claims. The government owes the country's car dealers a total of up to $11-million for rebates on EV sales, according to the Canadian Automobile Dealers Association. This reimbursement comes as the government has repeatedly promised to restore the Incentives for Zero-Emission Vehicles (iZEV) program, but has yet to provide a timeline for its restart.

Key Takeaways:

  • The federal government will reimburse car dealers for electric vehicle subsidies they paid to customers before the program's shutdown in January.
  • The reimbursement process will be announced to dealerships on Friday, with all eligible claims to be paid out.
  • The government owes car dealers up to $11-million for rebates on EV sales.
  • The Incentives for Zero-Emission Vehicles (iZEV) program is set to be restored, but no timeline has been provided.
  • Car dealers are reporting stalled sales due to the wait for rebates, with consumers putting off purchases in hopes of getting the incentives later.
  • Tesla's sales have plummeted, along with the public's regard for CEO Elon Musk's involvement in the U.S. administration.
  • Car makers that do not meet the 20-per-cent threshold for EV sales will be required to purchase credits from those that have exceeded the bar.
  • The government has set targets for EV sales to increase to 60 per cent by 2030 and 100 per cent by 2035.

Statistics:

  • The government owes car dealers up to $11-million for rebates on EV sales.
  • The iZEV program provided rebates of up to $5,000 per car.
  • Tesla's rebate claim in January was worth $43-million.
  • New vehicle sales rose by 11 per cent in April, but EV sales fell by 28 per cent.
  • Zero-emissions cars comprised 7.5 per cent of new vehicle sales in April.

Sources:

  • The federal government's web page on the iZEV program (no date provided)
  • The Canadian Automobile Dealers Association (no date provided)
  • The Toronto Star, citing Transport Canada data (January 2024)
  • Ms. Laura Scaffidi, spokesperson for Transport Minister Chrystia Freeland
  • Mr. Huw Williams, head of the Canadian Automobile Dealers Association
  • Statistics Canada, "New Motor Vehicle Sales" report (April 2024)