Rapid Growth in Electric Vehicle Sales Persists amidst Persisting Uncertainty
A Rebound in Electric Vehicle Sales Since Quebec's Subsidy Return
After a rocky start to the year, electric vehicle (EV) sales have regained momentum thanks to the return of Quebec's Roulez vert program. Yet, this resurgence is tempered by uncertainty due to potential U.S. tariffs from President Trump.
Take Martin Lefrançois, for instance, who was spotted at the recent Montreal Electric Vehicle Show (SVEM). He had been waiting for the Quebec subsidy to return, as he couldn't afford an electric car without it. He was test-driving various EVs, seeking to make an informed decision considering the investment involved.
Québec City was the epicenter of a steep sales decline when Roulez vert was paused in February. Ian P. Sam Yue Chi, CEO of the Corporation of Automobile Dealers of Quebec (CCAQ), laments a 46% drop in sales compared to the first quarter of last year. However, the revival of Roulez vert on April 1st has rejuvenated consumer interest. Several dealers reported that 40% of their sales in April were linked to electric and hybrid cars, compared to only 5% at the beginning of the year.
Roulez vert offers incentives of up to $4,000 for new and used electric vehicle purchases. However, this assistance will decrease to $2,000 in 2026 and disappear with the end of the program on January 1, 2027.
The bright future of EVs is overshadowed by lingering concerns about U.S. tariffs. Donald Trump has often expressed unreliable ideas regarding the automotive sector, threatening Quebecers with uncertainty about whether they should buy now or wait.
Those worries are founded. Quebecers are anxious about supporting American brands or vehicles made in North America, given the potential risks. Line Prévost, who intended to buy a plug-in hybrid car, has adopted a more philosophical approach, believing that Canadian automotive parts will ultimately be exempt from the 25% tariffs.
The CCAQ anticipates a slowdown in electric vehicle sales this year, asCEO Sam Yue Chi fears the target of having 2 million zero-emission vehicles on Quebec's roads by 2030 may be unattainable. This is especially concerning given the past experience of countries such as Germany, where electric cars sales literally plummeted when incentives ended overnight.
Sam Yue Chi is actively discussing potential adjustments to the target with the government. He says they're open to dialogue, and a working group with dealer members is proposing certain recommendations soon.
Bonus Reading
- How Are Charging Stations for Electric Vehicles Planned in Montreal?
- Subsidy Return, but Addition of a Tax on Electric Vehicles
- Quebecers Rethink Their Decision to Buy an Electric Car
It's worth remembering that Quebec remains committed to clean energy policies and supporting the EV market. The SVEM, which is held until Sunday, features 15 automobile brands, and for the first time, electric bicycles are also available. Notably, the SVEM is now being organized by the Montreal Automobile Dealers Corporation, which aims to merge the SVEM with the Montreal International Auto Show in a few years.
Meanwhile, other global events are impacting industries beyond Quebec. For instance, the Trump administration is seeking a judge to dismantle Google's advertising activity, arguing that leaving Google intact would prevent addressing the problem of its market position. The Trump administration's proposed budget is focused on defense, aiming to increase the Defense budget by 13%, while the Interior Security budget increases by 65%. Indigenous groups are opposing the auction sale at The Bay, demanding the exclusion of artifacts and sacred objects.
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The Impact of U.S. Tariff Threats on Electric Vehicle Sales in Quebec
U.S. tariff threats can have several significant impacts on electric vehicle (EV) sales in Quebec:
1. Price Increases
- Vehicle Costs: United States tariffs could significantly increase the cost of vehicles imported into the U.S., indirectly affecting Canadian markets. This might result in increased prices for certain EV models in Quebec markets.
- Supply Chain Impact: As Quebec is part of Canada, it will feel the effects of tariffs imposed on vehicles and parts entering North America. Higher costs may be passed on to consumers, making EVs less competitive compared to gas-powered vehicles.
2. Trade Disputes and Sales Projections
- Auto Sales Decline: Trade conflicts could lead to a decrease in U.S. and Canadian auto sales by 1.8 million units in 2025, potentially stalling growth over the next decade[3]. This decline would affect the overall automotive market, including electric vehicles.
- Regional Impact: Given Quebec's strong support for clean energy policies, it might witness a slower growth of its EV market due to these trade tensions, as higher prices and reduced availability could deter potential buyers.
3. Canadian Retaliation and Policy Adjustments
- Countermeasures: In response to U.S. tariffs, Canada has announced retaliatory measures, including tariffs on vehicles imported from the U.S. that do not comply with the Canada-U.S.-Mexico Agreement (CUSMA)[5]. These actions could further complicate the automotive supply chain and impact EV sales in Quebec.
- Policy Support: The Canadian government might consider adjustments to policies supporting the automotive sector, such as freezing zero-emission vehicle (ZEV) mandates until supply chains stabilize or removing the federal luxury tax on vehicles to support access to new technologies[5].
- The resurgence of electric vehicle (EV) sales in Quebec is largely due to the return of the Roulez vert program, which offers subsidies for both new and used electric vehicle purchases.
- Despite the optimism surrounding the revival of EV sales in Quebec, concerns about potential U.S. tariffs and their impact on prices have arisen.
- Consumers like Martin Lefrançois are eager to purchase electric vehicles, but they are hesitant to do so until the subsidies remain in place and the threat of tariffs diminishes.
- The Corporation of Automobile Dealers of Quebec (CCAQ) believes that the goal of achieving 2 million zero-emission vehicles on Quebec's roads by 2030 may be unattainable due to potential trade tensions.
- Quebec's commitment to clean energy policies extends to events like the Montreal Electric Vehicle Show (SVEM), which showcases various electric vehicle brands and, for the first time, electric bicycles.
- The CCAQ is actively discussing potential adjustments to the target with the government, and a working group with dealer members is set to propose certain recommendations soon.
