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Quebec automotive law hasn’t impressed automakers

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Quebec new automotive law imposes electric / plug-in hybrid / hydrogen fuel cell vehicle sales requirement that automakers will have to abide by from 2018, but car manufacturers aren’t impressed.

According to a recently passed legislation, automakers will have to ensure that a minimum of 3.5 percent of auto sales of 2018 vehicles must be from electric, plug-in hybrid or hydrogen fuel-cell vehicles. If they fail to meet with this requirement, they will have to buy credits from other auto manufacturers that have managed to achieve those targets and have surplus sales. There is a possibility of penalty as well, but the law isn’t very clear about it.

It turns out that the Quebec government intends to have as many as 100,000 electric vehicles on state roads by 2020. Further, the threshold for the sale of electric / plug-in hybrid / hydrogen fuel cell vehicles will increase to a massive 15.5 per cent for 2025 models. One key thing to note here is that there are no other laws like Quebec’s in Canada and while ten US states have similar legislation, they are not identical.

The legislation may have the right intentions, but automakers and their representatives believe that it will not have the desired impact and instead could affect sales of non-electric vehicles as well.

David Adams, president of the Global Automakers of Canada, has been quite vocal about the legislation and has called the law ‘very aggressive’. He is of the opinion that the thresholds will be a real challenge for the automakers. Adams said at the Montreal Auto Show that if the sales of such vehicles aren’t high, automakers could be forced to reduce the supply of non-electric vehicles on their lots so as to comply with the law and this will directly hurt sales of vehicles.

Electric vehicles are finding increased takers, but the sales volume isn’t particularly high with statistics indicating that such vehicles still account for less than one per cent of overall new auto sales in Quebec. If we look at sales of such vehicles across Canada, they make up 0.5 per cent of all auto sales only.

There are those who call the law and its requirement unrealistic. One among them is Michael Hatch, chief economist of the Canadian Automobile Dealers Association, who says that “it’s realistic to impose” such a mandate on consumers who are the ultimate decision makers regarding the vehicles they want to buy.

Legislative requirements aside, car manufacturers have been increasingly releasing new and improved variants of their electric vehicles. Chevrolet added Bolt EV to its plug-in hybrid Volt; while Chrysler launched its Pacifica plug-in hybrid; and Ford is planning to introduce 13 additional electric vehicle models by 2020. Luxury brands aren’t too far behind either with BMW and others introducing new electric models.

The need to increase sales of low- or no-emissions vehicles is understandable, but industry experts are of the opinion that there isn’t one single path to walk on to achieve those increased sales numbers. Legislation wouldn’t actually force consumers to buy the electric vehicles. Places like Ontario and British Columbia where there aren’t such legislation have witnessed increased electric vehicle adoption. Incentives to consumers will be one way to go and that’s evident from Ontario which offers up to $14,000 in rebates for electric vehicle purchases as compared to Quebec that only offers up to $8,000.

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