A clear beneficiary of the new policy is Japanese owned Lexus, which has a plant in Ontario.
One out of every 20 vehicles driven in Ontario, Canada will be electrically powered by 2020 if the huge incentives proposed by the provincial government are effective in forcing the market to favor electric vehicles.
The government of Premier Dalton McGuinty said in a statement that “Expanding the use of electric vehicles by consumers and government will help create and sustain jobs in the auto sector and put Ontario at the forefront of the new, green economy in North America.”
The plan, just announced today, would favor buyers of plug-in hybrid and battery electric vehicles with rebates of up to $10,000 paid for by taxpayers for vehicles purchased after July 1, 2010.
The maximum rebate appears to be among the highest, if not the highest, ever offered by a government to subsidize electric vehicles. It was not immediately clear how popular the plan will be among voters.
Nonetheless, the proposed Ontario plan continues a global trend that sees taxpayers’ money being shifted to help small numbers of relatively affluent vehicle buyers in the name of reducing greenhouse gases and combating global warming.
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A clear beneficiary of the new policy is Japanese-owned Lexus, which has a plant in Ontario. A hybrid version of its best selling RX350, the RX450h, will enter production this fall at Toyota Motor Manufacturing Canada (TMMC), which also builds the Corolla and Matrix models.
Toyota and Honda with their growing list of hybrid models will also benefit from the subsidies.
The 2010 Lexus RX 450h introduces an updated version of Lexus Hybrid Drive, with a 3.5-liter V6 Atkinson-cycle engine, lighter electric motors, a smaller and lighter power-control unit and other fuel-saving touches. It offers performance similar to small V8s, with an EPA-estimated 32 mpg city and 28 mpg highway (30 mpg combined) for the front-drive version. This is about 16-20% better economy than its RX400h predecessor.
GM is another company that stands to benefit from the hand out. The Chevrolet Volt electric vehicle will be available in the second quarter of 2011 in Canada, if current timing holds. The Auto Task Force in the U.S. said the Volt is too highly priced to be competitive with existing hybrids already on the market. Though not priced yet, the Volt is expected to sell for $40,000 to cover the cost of its expensive Lithium ion battery pack, electric and gasoline engines, and the transmission.
Also proposed by the Premier is allowing the use of less-congested High Occupancy Vehicle (carpool) lanes, even if there is only one person in the vehicle for what is called a limited period of five years.
To reward early adopters, the Ontario government will introduce a unique green vehicle license plate for plug-in hybrid and battery electric vehicles. Green plated vehicles will also be allowed access to public recharging facilities at select Ontario government and GO Transit parking lots. The University of Toronto and private companies such as Wal-Mart Canada will designate priority parking spots for vehicles with green plates.
Ontario’s Climate Change Action Plan aims to reduce greenhouse gas emissions in Ontario to 6% below 1990 levels by 2014, and to 15% below 1990 levels by 2020. The government claims transportation is the largest and fastest-growing sector for producing greenhouse gas emissions in Ontario and passenger vehicles are a major part of that. Ontario will add 500 electric vehicles to the Ontario Public Service fleet. Twenty per cent of new Ontario Public Sector passenger vehicle purchases will be electric by 2020.
McGuinty is Ontario’s 24th Premier. In the provincial election of 2003, he led the Liberal party to a majority government. He and his party earned a second consecutive majority on October 10, 2007. He has represented the riding of Ottawa South as its MPP since 1990.