Ottawa Expands Rebate Program For Electric Vehicles

The federal government in Ottawa is expanding its rebate program that’s aimed at making electric vehicles more affordable.

Transport Canada is going to include used vehicles in a federal rebate program for electric cars, something that is needed to make the program relevant to low- and middle-income consumers.

The move by Transport Canada comes as new data shows that more than $100 million of the almost $300 million in electric vehicle rebates issued to date have gone to Tesla owners.

Ottawa’s rebate program offers buyers an upfront discount of between $2,500 and $5,000, and sellers then claim the incentives to be reimbursed.

The Liberal government of Prime Minister Justin Trudeau introduced the electric vehicle rebate program in 2019 for people buying or leasing new zero-emission vehicles, including businesses and local governments, as a way to reduce pollution.

From then until now, government data shows that Tesla was reimbursed $102 million of the roughly $296 million sent to individual dealerships selling electric vehicles from among 15 qualified automakers.

Next to Tesla (NASDAQ:TSLA), Hyundai dealerships saw the second highest reimbursement amount, totaling $50 million, followed by Chevrolet dealerships at nearly $40 million.

Tesla currently only has one vehicle that qualifies for rebates in Canada, its Model 3 sedan. With a manufacturer's suggested retail price of $44,999, the Tesla Model 3 is just below the program's cut off for a low-end electric vehicle model of $45,000.

Transport Canada said providing consumers with more options when it comes to purchasing electric vehicles is important to "increasing the adoption of zero-emission vehicles in Canada."

Ottawa is looking to electric vehicles as a way to lessen reliance on fossil fuels and lower transportation pollution. The federal government has a target to have 10% of all light-duty cars be electric by 2025.

Transport Canada is exploring options for expanding incentives to include used zero-emission vehicles, which would broaden access to such vehicles for more Canadians, the department said in a written statement.