Quebec is raising its electric vehicle sales targets

The Legault government is raising its sales targets to 2029 and bringing them forward by two years to meet its goal: 1.6 million electric vehicles on Quebec’s roads by 2030. It is proposing to tighten its regulations and align them with them harmonized by California to achieve this number by 2035, more gasoline or diesel light vehicles will be sold in the province.

Quebec released a strengthened proposal for regulations on the sale of zero-emission vehicles (ZEVs) in the province on Thursday morning. Two elements stand out in the new proposal. First, from 2029 to 2027, the government wants to frontload the imposition of price caps on light vehicle manufacturers that require them to meet a minimum sales threshold for ZEVs. By forcing the industry to meet its targets two years earlier, Quebec projects that by 2029 there will be 100,000 more electric vehicles on the province’s roads than previously thought.

“This is good news,” said Daniel Breton, President and CEO of Electric Mobility Canada and former PQ Secretary of the Environment. We would have liked harder and faster requirements, but this is a step in the right direction. »

In the best-case scenario and according to government forecasts, Quebec’s new targets could result in the automotive industry selling only electric vehicles or plug-in hybrid vehicles as early as 2033, two years earlier than expected. Reasonably, Quebec predicts that the share of the auto market occupied by ZEVs will be over 94% this year. This share is set to drop to over 50% between 2028 and 2029.

Fewer credits, more power

The other key element included in Quebec’s regulatory proposal is a strict downward revision in the number of credits granted to manufacturers for each of the electric vehicles they sell in the province. The government uses this credit formula to encourage the achievement of its goals and in particular to financially penalize manufacturers who backtrack, as they have to resort to buying credit from their competitors to compensate.

The new formula proposed on Thursday grants one credit per electric vehicle sold from 2027. The current transitional formula provides for four credits per electric vehicle.

The value of a plug-in hybrid vehicle ranges from 1.3 to 0.5 credits. In addition, only plug-in hybrid vehicles with an electric range of more than 80 kilometers per charge are eligible. This threshold was previously 50 km per charge.

This means that manufacturers who switch purely electrically have an advantage, Daniel Breton calculates. As an example, he cites General Motors, which exited the plug-in hybrid market in 2019 and has been gradually electrifying its range ever since. Conversely, Toyota, which sells many plug-in hybrids whose electric range is under 50 miles, will need to accelerate its own transition if it is to meet Quebec’s targets.

“By tightening the ZEV standard, we are making it clear to manufacturers that they must integrate the Quebec market more closely into their business strategies and offer the population more vehicles and more models over the next few years,” said Benoit Charette in a press release. Minister for the Environment and the Fight Against Climate Change.

“Achievable” Goals

The targets set by the Legault government are intended to help manufacturers plan their shipments in the province. EV production is being hampered by the pandemic and a shortage of components. It is well known in the auto industry that markets that set binding sales targets sooner will receive a larger share of this production.

In its calculations, Quebec estimates that its new targets will result in a 22-25% market share for ZEVs by 2025. That share will rise to reach 65% to 78% of the market in 2030, which is far higher than Canada’s federal target and even the US target of 50% of sales this year.

Nevertheless, these are realistic goals, believes Daniel Breton. ZEVs accounted for 13% of all light vehicle sales in Quebec in the first quarter of 2022, he says. “It’s not a big step to climb to 2025. It is very accessible. »

Quebec will hold consultations on its new proposal in June and July. Electric Mobility Canada CEO expects manufacturers to voice their dissatisfaction. They are particularly concerned that Ottawa will emulate Quebec by setting similar targets, which could then sway Washington in the same direction, which currently has no mechanism to compel manufacturers to meet its electrification.

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