The Legault government is raising its sales targets by 2029 and advancing them by two years to reach its objective: 1.6 million electric vehicles on the roads of Quebec in 2030. It proposes to tighten its regulations and harmonize them with those of California to achieve that no gasoline or diesel light-duty vehicles will be sold in the province by 2035.
Quebec released Thursday morning a strengthened proposal for regulations regarding the sale in the province of zero-emission vehicles (ZEVs). Two elements stand out from the new proposal. First, the government wants to move forward from 2029 to 2027 the imposition on manufacturers of light vehicles of pricing constraints that require them to meet a minimum ZEV sales threshold. By forcing the industry to meet its targets two years earlier, Quebec calculates that 100,000 more electric vehicles than previously estimated will be on the roads of the province in 2029.
“This is good news,” says the president and CEO of Electric Mobility Canada and former PQ environment minister Daniel Breton. “We would have liked tougher and faster requirements, but this is a step in the right direction.”
In the best-case scenario and according to government forecasts, the new targets set by Quebec could lead the automotive industry to sell only electric vehicles or plug-in hybrid motor vehicles as early as 2033, two years earlier than expected. More reasonably, Quebec forecasts that the share of the automotive market occupied by ZEVs will be over 94% that year. This share should tip over 50% somewhere between 2028 and 2029.
Fewer credits, more electricity
The other major element contained in the Quebec regulatory proposal is a severe downward revision of the number of credits given 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 targets and especially to financially penalize manufacturers who are dragging their feet, since they must fall back on the purchase of credits held by their rivals to compensate.
The new formula proposed on Thursday grants 1 credit per electric vehicle sold from 2027. The current transitional formula gave 4 credits per electric vehicle. The value of a plug-in hybrid vehicle goes from 1.3 to 0.5 credit. In addition, only plug-in hybrid vehicles capable of an electric range greater than 80 kilometers per charge will be considered. This threshold was previously 50 km per charge.
What this means is that manufacturers who make an all-electric shift will be advantaged, calculates Daniel Breton. He cites General Motors as an example, which exited the plug-in hybrid market in 2019 and has since been banking on the gradual electrification of its range. Conversely, Toyota, which sells many plug-in hybrids whose electric range is under 80 kilometers, will have to accelerate its own transition if it wishes to reach the Quebec targets.
“By tightening the ZEV standard, we are clearly indicating to manufacturers that they must integrate the Quebec market more into their business strategies and offer the population more vehicles and more models over the next few years,” said in a press release. Benoit Charette, Minister of the Environment and the Fight Against Climate Change
“Achievable” targets
The targets set by the Legault government are intended to help manufacturers plan their supply in the province. The production of electric vehicles is complicated by the pandemic and a scarcity of components. It is generally understood in the auto industry that markets that impose binding sales targets sooner will receive a larger share of that production.
In its calculations, Quebec estimates that its new targets will result in a market share of 22 to 25% for ZEVs as early as 2025. This proportion will increase to reach 65 to 78% of the market in 2030, which is far higher than the Canadian federal target and even the US target of 50% of sales that year.
These are nevertheless realistic targets, believes Daniel Breton. ZEVs accounted for 13% of all light vehicle sales in the first quarter of 2022 in Quebec, he said. “It’s not a big step to climb by 2025. It’s very achievable.”
Quebec will conduct consultations in June and July on its new proposal. The CEO of Electric Mobility Canada expects manufacturers to make their dissatisfaction known. They are especially concerned that Ottawa will imitate Quebec by setting similar targets, which could then influence Washington in the same direction, which does not currently have a mechanism in place to compel manufacturers to meet its electrification.