Ontario to introduce healthy rebate to boost electric truck demand

The program will offer 60% off the purchase price of an electric truck, with a cap of $75,000 Canadian per vehicle.

The Canadian province of Ontario has announced an electric truck rebate of 60% of the incremental purchase cost compared to an equivalent conventional fuel vehicle, up to a cap of CA$75,000 per vehicle, under the new Green Commercial Vehicle Program.

The program offers incentives on other fuel types as well, such as natural gas; this includes fuel conversions. It will help bring the province in line with other incentive hubs like Quebec, California and New York that offer similar subsidies towards the cost of an electric truck.

The hope is that the rebate will boost domestic purchases of electric truck models like the Tesla Semi and Chinese rival BYD.

In November 2015, Ontario released a Climate Change Strategy to set the long-term vision for meeting carbon emissions reduction targets. The strategy includes cutting greenhouse gas pollution to 15% below 1990 levels by 2020, 37% by 2030 and 80% by 2050. Mtigating emissions away from road transport through electric vehicles will be essential to achieve this goal.

Since Tesla’s unveiling of the fully electric truck in November 2017, the company has received hundreds of high profile orders, including PepsiCo’s recent order of 100 Semis. Loblaw Companies Ltd. says it is among the first purchasers of Tesla’s new electric truck. Canada’s largest supermarket chain says it has pre-ordered 25 of the vehicles. The Ontario incentive plan could encourage purchases in the province.

However, the rebate program has an expiry date. The program itself is only allotted to fund up to C$12 million in rebates by March 31, 2018, equivalent to around 160 Tesla Semis.

The rebate program comes at a time where Ontario has been working to re-discover its manufacturing base. In recent years, ground has been lost to lower cost economies like Mexico and the southern United States, with the last significant commercial truck manufacturing plant in Ontario closing in 2011.

Six years on, DYB, the Warren Buffett-backed vehicle maker is set to open its first North American assembly facility in Ontario. The investment from DYB will work towards the opening of a factory to assembly 900 electric vehicles over the next five years. A potential game-changer in rebuilding the truck manufacturing base in anticipation of all-electric fleets.

Ramping up usage of electric trucks will require investment in charging infrastructure. The Government of Canada is committed to developing a national strategy by 2018 to encourage the use of electric vehicles on Canadian roads. In the 2017 Budget, CA$120 has been set aside for building out charging infrastructure, which includes the installation of 34 EV fast-charging stations along the Trans Canada Highway in Manitoba and Ontario in an attempt to encourage more motorists to use EVs on longer trips.

With this incentive, the upfront cost of an electric truck will be much similar to its diesel competitor. The Tesla Semi starting price is CA$191,000 and goes up to CA$230,000, with the incentive of up to 60% or CA$75,000 applied, electric trucks will become extremely competitive on price and therefore an attractive proposition for fleet owners.

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