A Bloomberg News author titled his recent article: Tipping point: U.S. crosses mass-adoption threshold for EVs of 5% of new car sales and went on noting; “Most successful new technologies — electricity, televisions, mobile phones, the internet, even LED lightbulbs — follow an S-shaped adoption curve. Sales move at a crawl in the early-adopter phase, then surprisingly quickly once things go mainstream.” The author’s prior sentence strongly suggested electric vehicles (EV) are a new technology but had the author bothered to simply Google search, “when was the first electric car invented” he would have discovered the date was around 1832 or about 190 years ago. There was no mention in the article about government grants handed out to EV purchasers for the cars or charging stations. The author obviously felt it was simply the “new technology” those buyers were endorsing to create that “S-shaped adoption curve” and not the taxpayer dollars supporting their sales. Blinkers were fully on!
Another article from last week in the FP suggested EV sales in Canada in the first quarter of 2022 accounted for 8.2 % of new vehicle registrations and had the following chart to demonstrate that!
What the foregoing article didn’t say was all light vehicle sales in Canada in the first quarter of 2021 had dropped by 12.3% to only 337,039 according to Automotive News meaning EV sales were about 27,600.
Cost to Taxpayer
The chart indicates the bulk of those sales were in the two provinces who provide grants BC (up to $3K) and Quebec (up to $7K) to EV purchasers. Most provinces also provide grants for home charging stations. In Ontario taxpayers have also joined with the Federal Government’s taxpayers providing Ford, GM and the Chrysler and Dodge factories in Brampton and Windsor collectively with over $2 billion in grants to manufacture EV in the province.
Another interesting and related issue was a video interview on June 29, 2022 by Financial Post’s Larysa Harapyn of Brian Kingston of the Canadian Vehicle Manufacturers Association in which he stated Canada would need 1.6 million public charges for the EV transition. Ontario has already provided funding for a number of charging stations as well as offering municipalities grants to assist them where and when needed but so far it’s only (term used lightly) $91 million. It is hard to determine the individual costs of those 1.6 million charging stations but looking at British Columbia the province is offering funding starting at “$20,000 per <50 kW DCFC installation, and ranges up to $80,000 per >100 kW charge port. These rebates can cover up to 50% of total project costs, including purchasing, planning, and installation costs.” What that suggests is at the low end (assuming the price is similar in all provinces) those 1.6 million charging stations may cost taxpayers well over $32 billion dollars. Totally mind blowing!
As if to underscore the uneconomical attributes associated with EV, another recent announcement by the Ontario Provincial Government and the Federal Government suggests the taxpayers of Ontario and the rest of Canada are a bottomless pit of funding. The Press Release was headlined: “Umicore to build industrial scale battery materials manufacturing plant in Loyalist Township, first of its kind in North America” and stated: “Umicore plans to make a $1.5 billion investment to build a first of its kind industrial scale cathode and precursor materials manufacturing plant, in eastern Ontario.” The release naturally rambles on about the benefits and only casually mentions what Mathias Miedreich, CEO of Umicore is quoted stating: “Moreover, we are most grateful to the Canadian and Ontario governments for their support and for their readiness to co-fund this planned project. The facility will help Canada and Umicore in their shared objective of achieving a carbon-neutral battery supply chain.” There is no mention of what the Canadian and Ontario taxpayers will be contributing but we should expect it will be at least a few hundred million.
Our Federal and Provincial Governments are both onside with their concept of satisfying the Canadian COP-26 commitments to eliminate fossil fuel use to achieve their net-zero targets. On the other hand, they seem immune to the fact many of the tax dollars they are using come from the Canadian oil and natural gas sector and taxes applied to us users of oil and gas. Their unprecedented spending and debt creation simply amlifies the negative effect on our economy causing energy poverty and job losses!
Stay tuned for Part 2 in this short series as we explore some of the issues that may make all of the spending highlighted above simply a waste of our tax dollars.
The bad news could well be: Canezuela is just around the corner!