GM sees EV coming under pressure as Canada rolls back subsidies and pushes back deadlines

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General Motors Co. said that governments in Canada are withdrawing subsidies for this country electric cars in a difficult time – just as they want car manufacturers to increase sales of cleaner vehicles.

Right now, some consumers can get as much as $12,000 off the price of an electric car. Federal rebates deduct as much as $5,000, while the province of Quebec forks as much as $7,000 and British Columbia offers a maximum of $4,000.

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But government officials are looking at the big picture budget deficits now restrict the use of taxpayer money. In March, Quebec said it would phase out subsidies by 2027. In June, British Columbia significantly limited the availability of its rebate, citing “available financing” and faster-than-expected growth in electric vehicle sales.

Meanwhile, the Canadian government has set an aggressive goal for phasing out gasoline vehicles.

It requires all new light vehicles sold by 2035 to be electric or plug-in hybrid. There are interim targets of 20 percent by 2026 and 60 percent by 2030. Under Canada’s proposed system, automakers would get compliance credits for electric vehicle sales and infrastructure investments, but would face deficits if they fall short. Some provinces have their own targets: BC’s threatens manufacturers with financial penalties for shortages.

“Just as mandates and regulations are starting to tighten, the timing doesn’t necessarily align well in the sense that support for purchasing incentives is disappearing,” Kristian Aquilina, president of GM Canada, said in an interview with Bloomberg News in Vancouver. “It will have to have an impact. So we cannot ignore that.”

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Detroit-based GM and its dealers will “work very hard to overcome that,” Aquilina said, but other support could also boost adoption, such as better charging infrastructure.

The incentives have made a big difference for buyers. The EV market share in Quebec and British Columbia is several times higher than in Ontario, where the consumer rebate was withdrawn in 2018.

GM started 2024 with electric vehicles making up about three per cent of sales in Canada and ended the third quarter with a 12.5 per cent share, a spokeswoman said, giving the company good orders for its Equinox electric SUV.

The auto giant is currently losing money on its battery-powered models, but CEO Mary Barra said Tuesday it is working to “turn a profit on electric vehicles as quickly as possible.”

If the Conservative Party of Canada If he wins the next election – which takes place in about 12 months – this could ease EV mandates. Leader Pierre Poilievre has criticized the policy, saying he fears it will cost consumers big time.

With help from Jay Zhao-Murray and David Welch

Bloomberg.com

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