GM Sees Timing Issue as Canada Reduces EV Rebates

The government is mandating that all new light-duty vehicles sold by 2035 must be electric or plug-in hybrid. (David Paul Morris/Bloomberg News)

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General Motors Co. said Canadian governments are pulling back on subsidies for electric vehicles at an awkward time — just as they want automakers to ramp up sales of cleaner vehicles.

Consumers can get up to C$12,000 ($8,673) off the price of an electric vehicle. Federal rebates deduct as much as C$5,000, while Quebec provides up to C$7,000 and British Columbia offers a maximum of C$4,000.

But government officials facing large budget deficits are reining in the use of taxpayer money. In March, Quebec said it will phase out subsidies by 2027. In June, British Columbia significantly narrowed its rebate availability, citing “available funding” and faster-than-expected EV sales growth.

Meanwhile, the Canadian government has set an aggressive target for phasing out gasoline-powered vehicles.

The government is mandating that all new light-duty vehicles sold by 2035 must be electric or plug-in hybrid. There are interim targets of 20% by 2026 and 60% by 2030. Under Canada’s proposed system, automakers get compliance credits for EV sales and infrastructure investments but incur deficits for falling short. Some provinces have their own targets — British Columbia’s threatens manufacturers with financial penalties for shortfalls.

“Just as mandates and regulations start to bite, the timing is not necessarily lining up very well, in that the purchase incentive support comes off,” GM Canada President Kristian Aquilina said in an interview with Bloomberg News in Vancouver. “It will have to have an impact. So we cannot ignore that.”

Detroit-based GM and dealerships will be “working very hard to try to overcome that,” Aquilina said, but added that other support could boost adoption, such as better charging infrastructure.

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

GM began 2024 with EVs making up about 3% of sales in Canada and closed the third quarter with the proportion at 12.5%, a spokeswoman said, attributing the increase to strong orders for its Equinox electric SUV.

The automaker currently loses money on its battery-powered models, but CEO Mary Barra said Oct. 24 it is working to turn a profit on EVs “as quickly as possible.”

If the Conservative Party of Canada wins the next election — due in about 12 months — it might relax the EV mandates. Leader Pierre Poilievre has criticized the policy, saying that he’s worried it will impose large costs on consumers.