Electric vehicle incentive policies in Canadian provinces

Abstract

We estimate the effect of financial point of sales incentives on the sales of battery and plugin electric vehicles across Canadian provinces from September 2012 to December 2016. Our findings indicate that purchase incentives in Ontario, Quebec and British Columbia cause the sales of new electric vehicles to increase by 5% to 8% on average due to a C$1000 increase in incentives, although with much larger or smaller effects when allowing differential effects for each province or each vehicle class. We find that around 35% of electric vehicle sales across these rebating provinces are attributed to the purchase incentives. Results of the counter-factual simulations imply that the cost of eliminating one tonne of carbon emissions across the provinces that offer incentives over the years of our study is, on average, C$480/t CO2.