In rapid succession, Quebec’s provincial government made two announcements that are destined to shape EV sales in the short and long term.

Firstly, while Quebec had previously announced a ramping down of subsidies that would see them gradually reduced and then disappear entirely over the next two years, on Monday December 16 the government announced that the uptake on the subsidies had been so great that it was suspending all rebates between February 1 and April 1 of next year.

The program, called “Roulez vert,” which roughly translates as “Go Green,” has apparently exceeded it’s budget and needs to take a breather.

“It’s very, very costly. The demand is very high, so we exceeded our budget. So we simply suspend the program for only two months. It’s not the end of Roulez vert,” Quebec Environment Minister Benoit Charette was quoted by the CBC.

But some believe that the suspension will be longer, possibly permanent, leaving car dealers in the lurch with EV inventories and pricing that took subsidies into account. It should be noted that Federal subsidies of up to $5000 are still in place. Provincial subsidies, currently at a maximum of $7000, drops January 1, 2025 to $4,000. For a plug-in hybrid vehicle with a battery of more than 15 kWh, the reduction is from $5,000 to $2,000. For the same type of model, but with a battery of less than 15 kWh, the incentive drops from $2,500 to $1,000.

Quebec has had among the most generous subsidy program in Canada. Ontario, in contrast, does not offer an EV incentive.

This week, Quebec’s government also announced a total ban on new ICE sales as of 2035. This does not make them an outlier by any stretch–multiple jurisdictions have similar decrees–but the behaviour of the market in Quebec might offer some insights into what the future will hold.

If it remains in place, that ICE ban might spur a rush ahead of its taking place as consumers “buy ahead” to avoid having to make the switch.

Case in point is the massive increase in EV sales in Quebec as the reduced subsidy loomed.

According to DesRosiers Automotive Consultants, while November new vehicles sales performance across the country was uneven, with some pronvincial sales up, with others down, Quebec saw a double digit increase.

Quebec registered a 16.4% sales increase for the month, building on an equally strong October. And it was all due to zero-emission vehicles (ZEV).

“A surge in ZEV sales in Quebec to take advantage of soon to be reduced provincial incentives boosted that market substantially,” commented Andrew King, Managing Partner at DAC. He continued, “Indeed more than 100% of the 5,600 unit increase in sales in Quebec were ZEV gains, with ICE vehicle sales actually declining in the province in November.”

According to a variety of reports, ZEV sales account for 34.6% of all cars sold in the province in the third quarter of 2024 (up from 28.4% in Q2). Quebec also accounted for more than half of all EV registrations across Canada. Typically, Quebec accounts just shy of 25% of new vehicle sales in Canada.

According to Statistics Canada, in the first three quarts of 2024 (the most recent rollup available), Quebecers bought 20% more EVs than more populous Ontario.

Total new light vehicle sales for November reached an estimated 156,000 units sold, up 8.8% above November 2023. Year-to-date, the market as estimated by DAC reached 1.72 million units sold, up 8.3% over the same time in 2023.

And even that overperformance was shattered over the first two months of the fourth quarter, which in combination with the expected pullback in sales over the coming months, will undoubtedly set dealers back on their heels and cause those forecasting sales ahead difficulty in predicting just what consumer behaviour will mean for vehicles on the road over the long term.

ADDITION:

Following publication, the Canadian Vehicle Manufacturers’ Association weighed in on Quebec’s recent announcements:

“The Quebec government’s announcement that it is suspending the EV purchase incentive program, Roulez vert, has severely distorted the vehicle market in the province and will effectively halt the sale of EVs,” stated association president and CEO Brian Kingston. “This announcement coincides with a ban on the sale of internal combustion engine (ICE) vehicles and increasingly unrealistic mandated EV sales targets that will limit consumer choice and drive up vehicle prices. “