As you probably know, the federal government recently announced a new subsidy program that allows buyers to receive an additional $5,000 rebate for fully electric vehicles and up to $2,000 for plug-in hybrid vehicles.
These amounts are significant and certainly represent a meaningful incentive for potential buyers. Nevertheless, is it really necessary to offer such subsidy programs?
Government subsidy programs have been around for quite some time, and there was even a period when the combined federal and provincial amounts exceeded $13,000.
In fact, the program was, in a way, a victim of its own success, and the budget allocated to it was depleted faster than expected. Rebates have therefore dropped considerably in recent years. Ironically, the price of electric vehicles has also seen a major decline.
In my opinion, it would not be surprising if manufacturers took advantage of the new subsidy program to readjust the price of their electric models upward.
By injecting money into a subsidy program for electric vehicles, the government provides an incentive for buyers. As a result, demand increases, which allows manufacturers to raise prices and increase their profits. Promoting electrification is also good politically, meaning the group for whom the subsidies ultimately change very little remains the consumers.
I cannot say that I am entirely against subsidy programs for electric vehicles, since they help boost sales, allowing manufacturers to invest more in research and development to improve these technologies. However, I believe we have reached a point where electric vehicles have proven themselves and no longer need subsidies to be appealing. What do you think?
Jean-Sébastien Poudrier
