Automotive News Canada - October 2017 - v2 - 24

* OCTOBER 2017

QUEBEC'S
EV BILL
OF PAIN

From top, the Jaguar
I-Pace, Nissan Leaf and Honda Clarity PHEV.
(PHOTOS: JAGUAR, NISSAN AND HONDA)

The province's
sales quota
is called unfair
because
automakers
can't force
buyers to
choose EVs
By MARK RICHARDSON
O N TA R I O C O R R E S P O N D E N T

MANY AUTOMAKERS COULD
face expensive penalties for failing
to meet Quebec's quotas for electric-drive vehicles as a percentage of
their sales.
Later this year, Quebec will finalize and pass Bill 104, which mandates that 3.5 per cent of an automaker's fleet for the 2018 model year
must be either fully battery electric (BEV) or plug-in hybrid electric
(PHEV).
The requirement will rise every
year for seven years: six per cent in
2019, 12 per cent in 2021 and 22 per
cent in 2025.
This is a significant challenge
for all traditional automakers, but
especially so for Mazda and Subaru.
The two Japan-based makers do not
have any BEVs or PHEVs on their
North America fleets. Mazda might
have a BEV available in some key
markets in 2019; Subaru is considering producing a PHEV next year
and a BEV in 2021, both as versions
of existing models rather than allnew vehicles.
"Since the new ZEV standard
begins with 2018 model year vehicles, without an electric vehicle
currently in our lineup we are not
able to earn the number of credits
required to meet the target in the
first year," said Sandra Lemaitre,
director of public relations for
Mazda Canada.
Lemaitre noted that the timetable

WHAT BILL 104 SAYS

* Quebec's Bill 104 is already
passed, but its final wording is still
under consideration. The deadline for commenting and suggesting revisions was Aug. 19. The
government is now considering
those comments and will publish
the final version of the act this fall.
After that, it's law.
* Right now, the crucial date for
Bill 104 is Sept. 1, 2019. That's
when all automakers must supply
final Quebec sales numbers of all
their 2018 model year vehicles. If
plug-in electric vehicles account
for less than 3.5 per cent of those
sales, there will be financial penalties.
* The accounting is complicated, using different levels of credits for battery-electric vehicles
and plug-in electric hybrid vehicles. As well, some credits can be
claimed initially for sales in 201418 model years and some used
cars will qualify. The total penalty
for missed credits could be hundreds or even thousands of dollars for every conventionally powered car sold.
* A few automakers can already
meet this initial challenge, and
others are confident they'll do so
by the deadline. But the quota
percentages are due to rise. In
2021, the minimum percentage
will be 12 per cent. In 2025, it will
be 22 per cent.
does not give automakers time to
develop new vehicles before the law
takes effect.
"The fact that the mandate is,
in a sense, retroactive, is unfair to
manufacturers," she said. "We are
being penalized at a very regional level without the opportunity to
develop and introduce credit-building technology - EV technology -
before it goes into effect."

'LEGITIMATE CONCERNS'
It could get expensive. Mazda
sold more than 25,000 cars in Quebec

in 2016, and a 3.5 per cent quota
would mean at least 875 of them
must be fully electric.
For every quota vehicle not
sold, the proposed penalty is $5,000,
which would mean a total penalty of
more than $4 million, and that's just
the first year.
Subaru is less vocal. "Subaru
Canada's position regarding
Quebec's announcement is reflected and incorporated in the Global
Automakers of Canada's submission to the Quebec government,"
said Julie Lychak, manager of public relations for Subaru Canada.
Global Automakers represents
the Canadian interests of 15 automakers. Its president says the passing of Bill 104 has been "a frustrating process."
"Our challenge to date has been to
get people to listen to what we think
are legitimate concerns about the regulations," said David Adams. "We'd
like to see an environment where we

can have a fruitful discussion with the government
about what we see as some
real challenges."
The challenges, Adams
said, "amount to not having the
same period of time to accumulate
credits prior to the legislation going
into effect" as with the legislation in
California, which Quebec is using
as its benchmark.
In California, the Zero Emission
Vehicle program set a target in 2012
that 1.5 million cars on the state's
roads in 2025 should be electric
vehicles. That meant automakers
would need to sell 15.4 per cent of
their fleets as ZEVs in 2025, though
the complicated accounting system
of credits for extra ZEVs sold before
then could reduce that number significantly. Ten other American
states, mostly in the Northeast, are
following the California example.
California accounts for about
half of all North America's electric-car sales, while Quebec
accounts for about half of all PHEVs
sold in Canada and almost 40 per
cent of all BEVs. Its government
rebate program is almost as generous as Ontario's, but those two

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