Ontario Controversy Adds More Fuel to the EV Incentive Debate

Two sides, two seemingly valid arguments. And in the middle, five $1.1 million cars.

Through the province’s Electric Vehicle Incentive Program, Ontario taxpayers helped lower the price of five Porsche 918 Spyders last year, according to Canada’s national broadcaster, leaving many wondering why their cash helped fund supercars for the ultra wealthy.

The program shaved just over $5,500 off the price of each $1.1 million hybrid Porsche — a limited edition model possessing 887 horsepower, with a top speed of 210 miles per hour.

One of those vehicles has since burned to the ground in a Toronto-area gas pump fire, which, for some, serves as a perfect metaphor for taxpayer-funded EV incentives.

The debate over whether to stimulate EV sales with public cash or let market forces rule the day isn’t relegated to any province, state or country. In Germany, Chancellor Angela Merkel is under fire for allocating $1.4 billion to boost her country’s stagnant EV sales.

The technology that goes into EVs warrants a higher sticker price (for now, anyway), but things get really prickly when subsidies flow to those who can well afford a high-end EV or hybrid, be it a Tesla Model X or the Fisker Karma of years past.

In Ontario, where the third-largest government expenditure is the interest payment on the province’s $300 billion debt, the debate rages anew.

Imagine the view of a resident who drives a ’02 Corolla and doesn’t make enough to purchase a new EV of any type, subsidy or not. Is it fair that they contribute to the purchase of someone else’s Tesla — and perhaps pay more at the pump to finance the program?

The flip side of the argument is that the resident stands to reap less noticeable benefits, like improved air quality, or perhaps greater investment in transit (which are funded heavily by gas taxes in Ontario), thus allowing them to ditch their old car.

When it started the program in 2010, EVs and hybrids were still newcomers to the automotive landscape. Their numbers were few, so the payout through the program wasn’t enough to ruffle feathers.

As automakers ramped up production of new models, the program remain unchanged, which led to nearly $880,000 of public money being spent on six-figure luxury EVs. That’s a lot of green spent on a small number of ultra-lux green wheels — surely, not much environmental bang for the taxpayer’s buck(s).

Belatedly recognizing this problem, the Ontario government changed the incentive rules in February. EVs costing more than $150,000 are no longer eligible, incentives for those costing more than $75,000 are capped at $3,000, and the available subsidy grew at the bottom end (to a maximum of $14,000), dependent on battery size and passenger capacity.

The changes seem more equitable, but many will still say governments have no place taking cash from one person’s hand to put a car in another person’s driveway.

With a flood of lower-cost EVs on the way, where do governments go from here? Should they double down on incentives, reform their rules, or eliminate the perk altogether?