Here’s a question no one is asking. How much do you think your neighbour’s EV costs us?About $59,000? WHAT?!!!Alberta recently instituted a $200 annual tax on electric vehicles (EVs) as a means to collect some financial compensation for road maintenance, which is normally drawn from fuel taxes. Since EVs don’t use gas or diesel, they don’t contribute to the fuel tax pool at the ‘pump’…uh, charger. A March 2nd 2024, Global News report indicated that last year there were 10,000 pure EVs (i.e. not hybrids) registered in the province out of 3.6 million total vehicles. So, a $200/year tax seems like a useless drop in the bucket, doesn’t it?Most people are aware that there are various EV subsidies to support manufacturing and infrastructure, so it all adds up.The federal government offers a direct subsidy for an EV purchase of $5,000. Some provinces, such as Quebec, offer an $8,000 subsidy. There are no subsidies in Alberta.The early adopter market for EVs is almost saturated; sales are slowing, and buyers are choosing between a hybrid, plug-in hybrid or traditional gas-powered vehicles. EV manufacturers have had to lower their prices in an effort to stimulate sales. As of December 2023, prices had dropped $19,600 since September 2022. These price drops have been devastating to EV manufacturers. As of Q3 2023, it is likely that Tesla is the only profitable EV maker. Ford, Rivian and others lose more than US$30,000 (CAD$ 40,000) for each EV they make. Companies can’t afford to keep building EV’s at a loss. The market is saying that customers are not prepared to pay more for EV’s, so the government must step up to back-stop (subsidize) those losses if the transition to EVs is to proceed as planned.The federal government is mandating EV targets using a credit system for each EV sold. They also offer EV manufacturers a deal whereby they can cover 10% of the sales target credits needed each year by investing in public fast-charging stations. The equivalent of one credit can be earned for every $20,000 spent on DC fast chargers if the units are operating before 2027. This has the effect of setting an initial price of $20,000 on tradeable credits! Gas-powered vehicle manufacturers will subsidize EV’s by paying to install fast chargers and thus get a tradeable ‘carbon’ credit. This will show up in the ticket price of the gas-powered vehicles you might prefer to buy. Either way, we as taxpayers or gas-powered vehicle buyers pay.The existing electrical distribution network to homes was not designed to handle EV charging. In most cases this will involve installing new transformers and running new electrical cables (usually buried) to each house. NetZero climate theology assumes that both transportation and home heating will shift to electricity, rather than fossil fuels. The Alberta Electric System Operator (AESO) reports that this will require substantial changes to consumer electric connections. A US study suggests that, per EV, utilities will need to invest between US$1,600 to US$5,400 in grid upgrades. So, let’s call it CAD$5,100. This cost will likely show up as an increase on your electrical bill.The federal government forecasts that it will have spent $1.9 billion on publicly available charging ports by 2027 to service a projected 1.9 million EVs registered at that time which equates to $1,000 per EV.Returning to the paltry annual $200 road maintenance fee that Alberta has imposed in place of taxes collected on fuel, which equals a present value of approximately $1,500 over the assumed 10-year life of the EV. This compares to a total present value of $7,500 in taxes not collected from an EV. (See calculations in the original report.) It is interesting to note that the carbon tax accounts for only $3,100 of the uncollected Alberta fuel taxes.The federal government states: “Carbon pricing is about recognizing the cost of pollution and accounting for those costs…”. If this were truly the case, carbon pricing would be the only subsidy justified for EVs. But it is not. These problems are well-documented by the Fraser Institute Review of Electric Vehicle Subsidies.Federal and Provincial Governments have announced “investments” in EV battery manufacturing, totaling $43.6 billion to be made over the next 10 years. A PBO report assumes that these investments will be debt-financed to the tune of $6.6 billion over 10 years.These battery projects are tying up $43.6 billion in project support plus $6.6 billion in debt charges which could be used to fund other projects such as hospitals, schools and roads.A subsidy of $59,000 per EV. Only in Canada, you say?Nope. A report published by the Texas Policy Foundation in October of 2023 arrived at a similar number of US$48,968 on an average 2021 model year EV over 10 years, which equates to a present value of roughly Can$50,000 per EV.Sustainable? I think not. Seems like $200 road maintenance fee is not enough.With files from Jim Hunter, P. Eng
Here’s a question no one is asking. How much do you think your neighbour’s EV costs us?About $59,000? WHAT?!!!Alberta recently instituted a $200 annual tax on electric vehicles (EVs) as a means to collect some financial compensation for road maintenance, which is normally drawn from fuel taxes. Since EVs don’t use gas or diesel, they don’t contribute to the fuel tax pool at the ‘pump’…uh, charger. A March 2nd 2024, Global News report indicated that last year there were 10,000 pure EVs (i.e. not hybrids) registered in the province out of 3.6 million total vehicles. So, a $200/year tax seems like a useless drop in the bucket, doesn’t it?Most people are aware that there are various EV subsidies to support manufacturing and infrastructure, so it all adds up.The federal government offers a direct subsidy for an EV purchase of $5,000. Some provinces, such as Quebec, offer an $8,000 subsidy. There are no subsidies in Alberta.The early adopter market for EVs is almost saturated; sales are slowing, and buyers are choosing between a hybrid, plug-in hybrid or traditional gas-powered vehicles. EV manufacturers have had to lower their prices in an effort to stimulate sales. As of December 2023, prices had dropped $19,600 since September 2022. These price drops have been devastating to EV manufacturers. As of Q3 2023, it is likely that Tesla is the only profitable EV maker. Ford, Rivian and others lose more than US$30,000 (CAD$ 40,000) for each EV they make. Companies can’t afford to keep building EV’s at a loss. The market is saying that customers are not prepared to pay more for EV’s, so the government must step up to back-stop (subsidize) those losses if the transition to EVs is to proceed as planned.The federal government is mandating EV targets using a credit system for each EV sold. They also offer EV manufacturers a deal whereby they can cover 10% of the sales target credits needed each year by investing in public fast-charging stations. The equivalent of one credit can be earned for every $20,000 spent on DC fast chargers if the units are operating before 2027. This has the effect of setting an initial price of $20,000 on tradeable credits! Gas-powered vehicle manufacturers will subsidize EV’s by paying to install fast chargers and thus get a tradeable ‘carbon’ credit. This will show up in the ticket price of the gas-powered vehicles you might prefer to buy. Either way, we as taxpayers or gas-powered vehicle buyers pay.The existing electrical distribution network to homes was not designed to handle EV charging. In most cases this will involve installing new transformers and running new electrical cables (usually buried) to each house. NetZero climate theology assumes that both transportation and home heating will shift to electricity, rather than fossil fuels. The Alberta Electric System Operator (AESO) reports that this will require substantial changes to consumer electric connections. A US study suggests that, per EV, utilities will need to invest between US$1,600 to US$5,400 in grid upgrades. So, let’s call it CAD$5,100. This cost will likely show up as an increase on your electrical bill.The federal government forecasts that it will have spent $1.9 billion on publicly available charging ports by 2027 to service a projected 1.9 million EVs registered at that time which equates to $1,000 per EV.Returning to the paltry annual $200 road maintenance fee that Alberta has imposed in place of taxes collected on fuel, which equals a present value of approximately $1,500 over the assumed 10-year life of the EV. This compares to a total present value of $7,500 in taxes not collected from an EV. (See calculations in the original report.) It is interesting to note that the carbon tax accounts for only $3,100 of the uncollected Alberta fuel taxes.The federal government states: “Carbon pricing is about recognizing the cost of pollution and accounting for those costs…”. If this were truly the case, carbon pricing would be the only subsidy justified for EVs. But it is not. These problems are well-documented by the Fraser Institute Review of Electric Vehicle Subsidies.Federal and Provincial Governments have announced “investments” in EV battery manufacturing, totaling $43.6 billion to be made over the next 10 years. A PBO report assumes that these investments will be debt-financed to the tune of $6.6 billion over 10 years.These battery projects are tying up $43.6 billion in project support plus $6.6 billion in debt charges which could be used to fund other projects such as hospitals, schools and roads.A subsidy of $59,000 per EV. Only in Canada, you say?Nope. A report published by the Texas Policy Foundation in October of 2023 arrived at a similar number of US$48,968 on an average 2021 model year EV over 10 years, which equates to a present value of roughly Can$50,000 per EV.Sustainable? I think not. Seems like $200 road maintenance fee is not enough.With files from Jim Hunter, P. Eng
