Canadian Government to Offer Up to $10,000 in EV Subsidies

The 2011 Chevy Volt





The Canadian government has just invoked the ire of Toyota Motor Company by offering up to $10,000 on vehicles like the Chevy Volt. The rebates take effect in July 2010 and the Volt will most likely qualify for the maximum rebate. Since Toyota does not have any concrete plans for mass producing plug-in hybrid vehicles, they are crying foul and bitterly complaining.

Currently in the US, Federal tax rebates up to $7,500 apply to vehicles that are electrified, whether they be all electric of plug-in hybrids.

From The Windsor Star:

Toyota Motor Corp. and several other critics are sounding an alarm over the Ontario government's plan to offer rebates of up to $10,000 to people who buy plug-in hybrid and battery-electric vehicles.

Toyota says the move looks like a deliberate ploy to help General Motors Corp., in which the province is now a minority shareholder after it rescued the company, along with the U.S. and Canadian governments.

Ontario Premier Dalton McGuinty chose a GM Chevrolet dealership in Toronto on Wednesday in which to announce that his Liberal government would offer the rebates on new vehicles after July 1, 2010. Stepping in and out of GM's upcoming Chevrolet Volt electric car, he said he wants one out of every 20 vehicles in Ontario to be electrically powered by 2020.

Ontario had to help stabilize the auto industry by providing aid to GM and Chrysler Group LLC, said Stephen Beatty, managing director of Toyota Canada Inc. But he said that was meant to be a one-time action -- step in and get out.

"How long does this continue?" Beatty said. "We can't set up a situation where the future of the industry depends on constant subsidies."

"This suggests that (the government) is prepared to be interventionist beyond their aim to help the industry recover."

Toyota, known for its hybrid technology, was not informed of the government's intention to offer the rebates and was taken off guard upon learning the announcement venue was a Chevrolet dealership, Beatty said. "The question is: Is this a well thought-out industry strategy? Or is it sort of the next stage in advancing a particular product and helping a particular company?"

Industry analyst Dennis DesRosiers echoed Beatty's concern. "A cynic would say this is just government subsidizing a product that is produced by a company they own. I think that is a bit too cynical. I just think it is bad policy, from a variety of perspectives."

Ontario lent General Motors US$3.16 billion as part of an overall US$60-billion rescue package for the automaker. Together with the federal government, it now owns a 12 per cent stake in the revamped GM, which exited bankruptcy protection last week.

"The fact they are offering such a high upfront incentive is an admission that there is high risk for this technology," DesRosiers said. "Years before the vehicles are available, they're putting a bribe of $10,000 in the marketplace, and the only reason they do that is because they anticipate they aren't going to sell."

DesRosiers said the government would have been further ahead if it followed the lead of the U.S., which has invested $25 billion in a fund to promote electric battery technology.

"If the government was serious about helping the electric car industry, they would have put one, two, three, five billion dollars into a fund to promote companies to develop the technology," he said.

Ontario's goal is to become a world leader in building and driving electric cars, McGuinty told reporters.

"This would put Ontarians into cleaner, more efficient vehicles, and expand the electric vehicle market for manufacturers," he said. "Expanding the use of electric vehicles by consumers and government will help create and sustain jobs in the auto sector and put Ontario at the forefront of the new, green economy in North America."