Automotive News Canada - July 2022 - 6

6
* JULY 2022
Provincial EV mandates
foreshadow federal plan
A national approach
is likely to use a credit
system, but 'how that's
going to work is still up
in the air a little bit'
By DAVID KENNEDY
T ORONTO BUREAU CHIEF
AS OTTAWA CONTINUES TO
weigh what policy levers to pull to
achieve its zero-emission-vehicle
sales mandates for 2026, 2030 and
2035, provincial ZEV regulations in
British Columbia and Quebec offer
a glimpse of how the pan-Canadian
mandate is likely to function, industry
experts say.
In its 2030 Emissions Reduction
Plan, released in March, the federal
government pledged to require that
ZEV sales reach at least 20 per cent of
total new sales of light-duty vehicles
by 2026, 60 per cent by 2030 and 100
per cent by 2035.
Environment
and Climate
Change Canada,
the department
leading enactment
of the mandate,
has begun
drafting regulations.
A new
round of consultations
with industry
stakeholders
is planned in the
" near future " to
help the government
iron out
the specifics, said
Kaitlin Power,
the department's
press secretary.
" This includes
determining
annual requirements,
the design
of a potential
credit system and
how to address
regional considerations, "
she wrote
in an email to
Automotive News
Canada.
Power:
The federal
government
and auto
industry must
decide " the
design of
a potential
credit system
and how
to address
regional
considerations. "
PHOTO:
LINKEDIN
The finer
details of the policy
remain undetermined.
Daniel
Breton, CEO of
Electric Mobility
Canada (EMC),
which advocates
on behalf of ZEV
adoption, said
Breton: Any
federal ZEV
mandate will
be designed
to regulate
automakers
and not
dealerships.
FILE PHOTO
every indication points to the federal
mandate's revolving around regulating
automakers. This has been the
approach since the first ZEV mandate
was put in place in California,
Breton said, and is the route both
B.C. and Quebec have taken.
" It has always been manufacturer-focused,
never dealer-focused, " he
said.
CREDIT-BASED MANDATE
In B.C., automakers earn credits
for consumer sales of battery-electric
or plug-in hybrid vehicles, with
more credits earned for vehicles
with greater electric range. A similar
framework governs consumer vehiIf
automakers are
forced to restrict
inventory to keep
their credit balance
in the black, a ZEV
sales mandate could
" rapidly " become a
dealer problem, said
the GAC's David
Adams.
AUTOMAKER PHOTOS
lot lower " than they
are in B.C. or Quebec
because automakers
have no ZEV sales benchcle
sales in Quebec and forces automakers
in the province to sell a certain
percentage of ZEVs or exchange
credits with competitors that do so.
The threshold will progressively
rise over the next dozen years until
all sales must be ZEV.
" They have to reach a
certain amount of credits, "
Breton said. " And if they
have too many credits, they
can exchange them or sell
them to other manufacturers
who don't have enough
credits. "
For instance, during the
first reporting period under
Quebec's ZEV mandate,
introduced in 2018, thousands
of credits changed
hands between automakers.
Having earned a large
number of credits, General
Motors and Tesla each transferred
credits to competitors.
Meantime, Fiat Chrysler
Automobiles, Honda, Mazda,
Subaru and Toyota were on
the receiving end, a provincial
report shows.
David Adams, head of
the Global Automakers of
Canada (GAC), said his members -
overseas automakers in Canada -
expect the federal government will
follow suit.
Adams:
Instead of
increasing
the supply of
zero-emission
vehicles,
a federal
mandate
might prompt
automakers
to reduce
the number
of gasoline
and diesel
vehicles.
FILE PHOTO
marks to meet, Breton said.
Adams, on the other hand, said
the ZEV mandate will not necessarily
ensure product and could result
in automakers holding back inventory
of gasoline and diesel vehicles.
Instead of guaranteeing
supply, he said, the mandate
could prompt automakers
to begin managing
their inventory and " put a
constraint on the number
of overall vehicles " sold.
If automakers are forced
to restrict inventory to
keep their credit balance in
the black, Adams said, the
mandate - which many
dealers are dismissing as
an automaker problem -
could " rapidly " become a
dealer problem.
TARGET UNCERTAINTY
Ensuring equitable ZEV
distribution coast to coast
is another major concern
as Ottawa pieces together
its mandate.
" But how that's going to work is
still up in the air a little bit, " he said.
Ottawa confirmed that it is investigating
a credit system but did not
elaborate.
INVENTORY INCENTIVE
Along with progressively increasing
adoption of ZEVs, the federal
mandate will help bolster ZEV inventories
across the country, Breton
said. As evidence, he pointed to a
steadier supply of ZEVs in B.C. and
Quebec.
Because automakers are required
to sell a certain percentage of ZEVs
in the two provinces, they allocate
ample supply despite ZEVs being in
high demand, Breton said. This is in
contrast to Atlantic Canada where
governments offer provincial ZEV
rebates, but no sales mandates are in
place.
Sales on the East Coast are " a
While the federal government
has committed
to ZEVs accounting for 20
per cent of total sales by 2026, it has
not disclosed whether each province
must reach that target or if the goal
will be tracked cumulatively. That
means some provinces could underachieve
but be propped up by others
that were overshooting the target.
Without a system to distribute
EVs throughout the country, Breton
said, " [Automakers] could keep
sending most EVs to B.C., Ontario
or Quebec " and still reach their
sales thresholds, potentially leaving
Atlantic Canada and the Prairies
with predominantly gasoline or diesel
vehicles.
Ottawa confirmed it was taking
such regional considerations into
account but did not elaborate on
what mechanisms it was considering
to ensure cross-country ZEV supply.
Upcoming consultation sessions with
the auto industry will address the
issue, Power said.
The government is scheduled to
release draft regulations laying out
the federal ZEV mandate this year
or next. - ANC
TRENDING
STORIES
automotivenews.ca
ONGOING WEB COVERAGE
CHARGING UP CANADA
General Motors and electric-vehicle company VinFast are the
latest two automakers to announce EV charging partnerships with
third-party providers. As the industry awaits government-funded
infrastructure, more automakers are looking to partners to help
customers charge their EVs.
FROM THE GROUND UP
Lithium and nickel are needed to make batteries for electric vehicles.
Canada has them, but ramping up to get them out of the ground in
significant quantity will take years. Will there be enough supply for
automakers to meet looming government sales targets for EVs?
LEARNING TO HANDLE EV EMERGENCIES
GENERAL MOTORS IS REVIVING A
decade-old program in Canada to train first
responders to handle situations involving
electric vehicles. The revamped program,
named " EV First Responder Training, " also
aims to combat misconceptions around EV
batteries, such as water being dangerous
around lithium battery fires. The training will
be delivered in a four-hour block through live presentations, videos,
animations and virtual demonstrations.
FOR THE F-150 LIGHTNING, A DEFLATING RECALL
FORD IS RECALLING ABOUT 2,900 F-150 LIGHTNING
electric pickups globally - 220 in Canada - because a software
problem could result in a failure
to provide adequate warning of
low tire pressure. Ford said the
truck's tire pressure monitoring
system light might not illuminate
when intended and might
not provide adequate warning
of low inflation. The recall is the
first for the Lightning. No colliPHOTO:
FORD
sions or injuries have been connected to the recall.
DODGE TO FLEX MUSCLE AT DREAM CRUISE
THE STELLANTIS PERFORMANCE BRAND SAYS IT'S GOING
to be an electric summer. Dodge plans to preview products
during what it calls Speed Week. It plans a series of announcements
Aug. 15-17 in the lead-up to suburban Detroit's Woodward
Dream Cruise Aug. 20, where Dodge will have a display for the
first time since 2019. The brand says it will make " current muscle
announcements " Aug. 15, and " gateway muscle " updates Aug.
16. " Future muscle " plans will be unveiled Aug. 17.
DILAWRI'S 'STRATEGIC' U.S. EXPANSION
ONE OF CANADA'S LARGEST DEALERSHIP GROUPS HAS
bought its first stores in the United States. The Dilawri Group of
SUPPLIED PHOTO
Companies purchased
Ferrari of Washington
and Maserati of
Washington, both
in Sterling, Va.,
on the outskirts of
Washington, D.C. The
deals are what the
group described as its
" first strategic expansion "
outside Canada. " We believe these dealerships will be an
excellent opportunity to establish our presence in the U.S. market, "
said Kap Dilawri, the company's co-founder.
INCENTIVES FOR COMMERCIAL EVs
THE FEDERAL GOVERNMENT IS BROADENING ITS
financial support for zero-emission vehicles beyond the consumer
market through a $550-million incentive program that will help
businesses buy or lease electric commercial vehicles ranging from
full-sized pickups to semitrucks. The Medium- and Heavy-Duty
Zero-Emission Vehicles (iMHZEV) program is designed to make
up about 50 per cent of the price difference between a conventional
gasoline or diesel commercial vehicle and a ZEV. - ANC
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Automotive News Canada - July 2022

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