Re: Electric Vehicle…

Re: Electric Vehicle Incentives, Infrastructure and Awareness
On behalf of the 15 members of Global Automakers of Canada, I am writing to you to reflect the collective views of the membership with respect to the core areas for which the Ministry of Transportation is seeking further input and commentary on as indicated in the Discussion Paper entitles Electric Vehicle Incentives, Infrastructure and Awareness that was released for comment on October 14th 2016.
By way of background, Global Automakers of Canada is the national industry association representing 15 of the world’s most prestigious automotive brands. The GAC advocates for sound public policy to support a competitive and sustainable automotive market in Canada. Our members are committed to meeting the mobility needs of Canadians by providing greater consumer choice, offering leading edge safety and environmental technologies and eliminating unnecessary regulatory and trade barriers.
In 2015, the member companies of the GAC sold 1,063,652 vehicles representing 56.0% of the Canadian automotive market. This represents a growth in sales of 4.3% from 2014. The members directly and indirectly employ some 77,000 Canadians and 63% of the vehicles sold by member companies in Canada were built in the NAFTA region.
Our members have been at the vanguard of the introduction of advanced technology vehicles, whether they are conventional hybrid, plug-in hybrid electric, full battery electric or hydrogen fuel cell electric vehicles. Examples of this leadership include the Mercedes-Benz fuel cell stack production facility in Burnaby, B.C., Hyundai’s leadership in putting the first fuel cell vehicles into the hands of actual customers in Canada, and soon the production of the hybrid variant of the highly successful Toyota RAV-4 at Toyota’s production facility in Woodstock, Ontario, which will join the Lexus RX450H as the second hybrid vehicle produced in Canada.
While those are just some examples, the entire membership is committed to taking carbon out of the longer term transportation equation. This will be essential in order for all automakers to meet the very stringent 2017-2025 GHG emissions regulations. Neither is it lost on our members that despite the real and significant reductions from the light duty vehicle sector, transportation remains the second largest source of GHG emissions nationally at 23%. It is clear that the road to success in the future for member companies is through decreasing the environmental footprint of their products.
In that regard, we are pleased to provide our comments on the three core areas outlined in the discussion paper, namely:
•the Electric Vehicle Incentive Program;
•the Electric Vehicle Chargers Ontario Program, and;
•Educational Awareness.

Electric Vehicle Incentive Program (EVIP)
1.What should the government tie the EV purchase incentives to (e.g. vehicle tailpipe GHG emissions, battery size, technology type etc.) in order to support a significant growth in EV sales and GHG emissions reductions?

If there are to be incentives for electric vehicles (which GAC would define as including hydrogen fuel cell electric vehicles) then it would make sense to tie the incentive to the desired public policy goal(s) to be achieved which in this case are two-fold: 1) increase EV sales and 2) reduce GHG emissions. The purchase of an EV however does not necessarily translate into a reduction of GHG emissions as the latter depends on how the vehicle is actually used by the purchaser. Ideally, then the rebate would focus on electric kilometers travelled during vehicle use.

Consumer concerns and preferences must also be factored into the incentive equation. Consumers purchasing plug-in electric vehicles (PEVs) experience the current limitations and inconvenience associated with pure battery electric vehicles (BEVs) which revolve around range anxiety, charging station availability, degraded performance in winter. These issues are somewhat alleviated with plug-in hybrid electric vehicles (PHEVs) which comprise 46% of all PEVs sold in Ontario. PHEVs have the advantage of a conventional gasoline engine as a back up to either generate electricity for the battery when it becomes depleted or to power the vehicle directly when the battery is depleted These issues can also be more fully addressed with a hydrogen fuel cell electric vehicle – which have a fuel range that is roughly equivalent to that of an internal combustion engine vehicle, however, no public fueling infrastructure exists for these vehicles. In this regard, we emphasize that it is important for the definition of “electric vehicle” to include hydrogen fuel cell electric vehicles (FCEVs). These vehicles are also zero emission vehicles and if a plan is not put in place now to accommodate them via both vehicle incentives and infrastructure development, Canada generally and Ontario specifically may miss this opportunity to be able to benefit from both technologies. Additionally, the program to which manufacturers selling “electric vehicles” participate in is called the Electric and Hydrogen Vehicle Advancement Partnership. Consistency with respect to the inclusion of all EVs needs to be assured across all government programs and initiatives.

The cost of new technology remains a challenge for consumers. As noted in the discussion paper, mid-range EVs can cost up to 90% more than a comparable gasoline powered vehicle, however that gap is narrowing. Any near-term incentive therefore, needs to not only address the price differential but also address the fact that, at least with pure BEVs and despite incentives, consumers are being asked to pay more for their new vehicle for less – in terms of less driving range, less convenience, less fuel station availability.
2.How should the government adjust the current 30 percent MSRP incentive cap and the $3,000 cap on vehicles with an MSRP of $75,000 and above in order to promote EV sales and GHG emission reductions in a fiscally responsible manner (e.g. remove the cap? Relax the cap?)
With respect to the issue of the 30% MSRP incentive cap, if the Province is serious about increasing the number of PEVs on the road then the cap as a percentage of MSRP should either be removed or increased. Increasing the incentive cap to 50% of the MSRP could make a number of BEVs and PHEVs more attractive from a purchasing perspective. However, making the incentive more robust will only be fully optimized if there is in place a robust fueling infrastructure (charging station and hydrogen fueling stations) preceding or co-incident with revisions to the incentive cap.
From discussions with member companies whose products are impacted by cap based on MSRP, it would seem that the incentive remains a contributing factor with respect to whether or not a customer purchases an EV variant or a conventional alternative. Therefore, removal of the cap could facilitate more EV sales.
While it is appreciated that the optics of providing incentives on expensive automobiles are challenging, given the public policy objectives of increasing the number of EVs on the road and decreasing GHG emissions, should the MSRP of the vehicle factor into consideration for eligibility regarding the incentive? If there is a real risk that Ontario might exceed the allocation of up to $160 million for incentives then there may be merit in imposing a cap in future years on vehicles with a high MSRP, otherwise the removal of the cap facilitates both public policy objectives highlighted in the Discussion Paper. Furthermore, given that even the maximum amount of incentive represents a smaller portion of the overall purchase price of more expensive vehicles, it can be argued that the incentive is already “scaled” as a percentage of purchase prices.
•Do you think these caps influence an EV buyer’s decision to purchase an EV or a specific type of EV?
Likewise with the elimination or adjustment upward of the 30% of MSRP cap more EVs would be sold because the selling price of EVs at the lower MSRP price point of the spectrum would be highly competitive to that of a conventional vehicle. It also needs to be understood that it is complex and challenging for both manufacturers and consumers to determine the incentive on two vehicles that may look very similar (and perform the same from a GHG emissions perspective) but have different incentive levels simply because one model might be better equipped than another and therefore attract a higher MSRP.
We also recommend that the EVIP be applicable to the first retail registration of the PEV. Many manufacturers with PEVs in their product portfolio wish to allocate such vehicles to employees for company vehicles which serves to both broaden the visibility of the PEV and also provides for experiential opportunities for potential purchasers as the vehicle is driven by or transports neighbours and business associates. By allowing the incentive to be applied on the first retail registration means that the purchaser would also benefit from a depreciated purchase price as a used vehicle making slightly used PEVs that much more affordable.
•How can the government adjust the EVCIP to benefit even more EV owners?
Currently the EVCIP is tied to the receipt of a rebate from the EVIP, as has been noted in the discussion paper. Removing this linkage would provide impetus for the installation of charging stations at second residences by allowing the incentive to be applicable to these charging station purchases as well. Further, increasing the incentive for the charging station would reduce the overall upfront cost to consumers because a consumer will not purchase an electric car without purchasing a charging station.

Electric Vehicles Chargers Ontario Program (EVCO)
With respect to the EVCO program, our members are of the perspective that any charging stations installed under the programs should be done at locations that maximize accessibility and demonstrated placement need. In this regard, it is imperative that charging/fueling stations are placed where there is demonstrated need, as opposed to where contractors under the program may wish to install them. Likewise, the charging stations need to be situated at a site where they are highly accessible and can accommodate the maximum number of vehicles for recharging.
The PEV owners also need a robust, updated, real-time charging station map that not only identifies the address where the charging station is located but also where at the address the station is located ( e.g. basement of parking lot, south west corner) as well as whether or not the charging station is in use.
The additional comment that we have with respect to the charging station program is that it should be expanded to include hydrogen fueling installations as well and not focus exclusively on electric vehicle chargers. For Ontario to leverage ZEV vehicle sales in the form of hydrogen fuel cell electric vehicles, basic fueling infrastructure must be in place to facilitate consumer acceptance of FCEVs.
Education and Awareness
EV Educational Campaigns
1.What are your current perceptions related to EVs? How can government help in improving perceptions related to EVs, and help consumers better understand the benefits of EVs?
PEVs are a viable vehicle option for many Ontarians. As highlighted in the recent publication entitled, “Accelerating the Deployment of Plug-In Electric Vehicles in Canada and Ontario” 80% of Canadians drive 50 kms or less a day. However, there remains very little understanding related to electric vehicle technology, its benefits and the long term savings accruing to EV owners. Despite Ontario significantly increasing the PEV purchase incentives this past February, overall cumulative sales of PEVs in the Province are only 8,253 units as of September 30, 2016 which is roughly equivalent to one month’s worth of sales of Canada’s most popular vehicle – the Ford F-Series pick up truck. However, on a positive note, year-over-year sales of PEVs for the first three quarters of 2016 are up 63% compared to 2015 according to FleetCarma.
Encouraging and assisting in funding more PEV demonstration initiatives would allow more consumers to learn about PEVs directly through the driving experience. While the EV showcase as outlined in Ontario’s Climate Change Action Plan may be a way to allow consumers to experience and compare different PEVs, that showcase would appear to be limited to one location. Assisting certified EV dealers (regardless of manufacturer) with tools answer any questions about EVs, determine the right charging station for the model vehicle they are acquiring, facilitating the installation of the charging station with a reputable electrical contractor etc. through an easy to use tablet-based interface would assist in the education process of both sales staff and consumers at many locations. A Canadian company Mogile Technologies, is test marketing such a tablet system with significant success in the Quebec market. We would encourage the Ontario government to sit down with Mogile and determine if there is an opportunity for that company to play a role in simplifying the EV education and sales process.

2.What innovative education and/or awareness programs or policies currently operating in other jurisdictions that provide support for the adoption of EVs, could be applied in Ontario?
See above comments with respect to Mogile Technologies.

3.Who should the government be partnering and collaborating with to deliver an EV educational campaign?
It would be important to have manufacturers, dealers and organizations such as the CAA representing the driving community, and Plug’n Drive to be involved in any sort of education campaign. Other organizations such as the aforementioned Mogile Technologies and FleetCarma can assist with tools already available in the marketplace to both simplify the education process of EVs as well as secure a better understanding of the type of PEV that would be best suited to the consumer’s needs based on their driving habits.
4.To increase education and awareness of the benefits of EVs, what forms of communication and key messages should the government consider to reach an audience beyond the EV community?
Many misconceptions surround the EV. Communication initiatives dispelling those misperceptions could assist raising interest in EVs beyond the early adopters. For instance, messages that focus on the performance of EVs and the vehicles being fun to drive would assist in dispelling the notion that EVs are glorified golf carts. Social media could also be used to provide video testimonials from current EV owners to dispel some of the myths around EVs by simply relating their own experience with their vehicle. Simple but creative visuals could display the dry topic of cost savings associated with the operation of EVs.
Partner and Dealership Programs
It is worth noting here that the Government of British Columbia was able to create a true partnership with the dealers by setting up the New Car Dealers Association of British Columbia as the administrator of the Clean Energy Vehicle Program. This partnership engendered a much more cooperative and collaborative effort between government and industry with respect to the promotion of electric vehicles and fuel cell vehicles. This is a model that the Ontario government may want to investigate and potentially model.
1.What are potential tools that can be used to increase the availability of EV models on the showroom floor, for test drives and for purchase at dealerships?
Dealers order vehicles into inventory that they expect to sell and for which there is high consumer demand. Dealers are less inclined to order into inventory vehicles that are relatively niche and may take longer to move off of the dealer’s lot. The dealer’s challenge is further complicated by having sales people appropriately trained on the new technology that PEVs represent.
The issue of vehicle availability could be addressed through the minimization of the dealer’s risk or exposure in bringing one or more EVs into inventory. This risk minimization could be done in many ways including government subsidization to the dealer to bring more EVs into inventory with the subsidy being repaid when the EV was sold. This would reduce the dealer’s carrying costs for EVs and would incent the dealer to bring more EVs into inventory than they might otherwise have done.
2.What supportive mechanisms and/or incentives should the government provide to EV salespeople and dealerships in order to increase EV sales?
Other jurisdictions have considered per vehicle incentives payable to the sales person for each EV sold. This incentive payment is made in recognition of the fact that the sales process for an EV is generally longer and more involved than the sale of a conventional vehicle. The sales incentive seeks to bridge that gap and encourages salespeople to invest the extra time with the consumer if the consumer is expresses interest in the purchase of an EV.

Private Fleet Awareness Campaign
1.How can we effectively raise awareness of EVs and EV incentives to private fleets?
Active engagement with the NAFA Fleet Management Association would be an essential part of raising the awareness of EVs and EV incentives. Additionally, FleetCarma of Waterloo, Ontario specializes in assisting fleets in determining whether or not an EV is an appropriate fit for a company’s fleet of vehicles and determining which type(s) of EVs would be most suitable for the fleet given how the vehicles are used. FleetCarma should be engaged as a partner by the government to work with fleets to facilitate increased EV sales by factual demonstration of the value associated for fleets through the incorporation of EVs into their fleet.
2.What elements should be included in a decision -making tool or cost calculator to help fleets consider purchasing an EV?
Fleet Carma would be in the best positon to advise the government with respect to this question.
On behalf of the members of the Global Automakers of Canada we appreciate the opportunity to provide feedback on this discussion paper and we look forward to continued engagement with the government on this file.
Regards,

Global Automakers of Canada

[Original Comment ID: 196580]