BC overhauls EV rebates after years of the rich drawing public subsidies for luxury vehicles

BC’s electric vehicle rebate program has been so popular that several times over the last five years the provincial fund has run out of money.

But there’s always been a nagging concern underlying the whole venture: Are the rebates actually helping ordinary middle-class British Columbians afford an EV? Or is the money just going to rich people who were already going to buy that high-end Tesla and could have afforded it anyway without a taxpayer subsidy?

An answer of sorts came from the BC government this week, when it announced it was overhauling the EV rebate program in order to link rebate eligibility to income (while also boosting the maximum amount by $1,000, to $4,000).

New income limits for EV rebates

The new rules mean if you earn more than $100,000, or live in a household earning more than $165,000, you no longer qualify for provincial rebates on your next electric, fuel cell or long-range hybrid vehicle purchase.

Energy Minister Bruce Ralston acknowledged the concern that’s been unspoken and unaddressed for several years.

“We’re wanting to increase the rebate amounts, but we wanted to reshape the program a little bit in order that rebates are going to the people who need them the most,” he said.

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In other words, yes — many of those who received taxpayer-funded EV rebates over the last five years were wealthy enough to afford luxury electric vehicles at the full sticker price but nonetheless were able to dip into $192 million in public funding for rebates.

How often did this occur?

That depends on how you count it.

High-income earners used EV rebates for luxury vehicles

You can do some napkin math based on the rough figures and estimates that underpin the money spent since the earliest days of the program in 2015.

Roughly 41 per cent of the buyers who logged rebates were purchasing what we’d consider luxury electric vehicles and hybrids — Teslas, BMWs, Mercedes, Audis and Porsches. 

These aren’t moms and dads upgrading their station wagons to a hybrid Nissan Leaf, as the BC government often tries to brand the program. These are mostly high-income earners able to afford upwards of $77,000 on luxury-brand electric vehicles (before government dropped the rebate cap to $55,000 in 2019). 

Even this year, there are 2,472 people receiving mostly $3,000 EV rebates for Tesla Model 3s that retail for more than the government cap, because they pre-ordered the vehicles some time ago before the price went up to the current $61,980 base.

The new income-based rules for EV rebates will largely put a stop to the high-income earners getting public subsidies for vehicle purchases they could afford to make without taxpayer financial help.

Which is good, and more in keeping with the spirit of the program as re-envisioned by Premier John Horgan this year.

Still, it’s likely that around 13,500 people the province now considers too wealthy to qualify for a rebate were able to get approximately $44.6 million in public subsidies for their purchase over the last five years. They won’t be able to do so again going forward. But what’s done is done.

New rules don’t link company revenue to rebates

Despite the new changes, there remain questionable areas in the program.

Businesses, municipalities, nonprofits, car-sharing companies and even car dealerships themselves are eligible for rebates. Despite new income rules to ensure people only get financial help if they need it, there are no such requirements on the size or profitability of companies.

When I did a deep dive into the 2019 rebate stats for a story several years ago, I discovered doctors, developers and numbered companies scooping up millions in taxpayer-rebates, squeezing out ordinary people for funds before the program ran out of money and had to be refreshed. 

The government has largely chosen not to curtail these dubious draws upon the rebate fund.

Do new EV rebate rules strike the right balance?

Whether this bothers you at all probably depends on how urgent you consider the climate emergency, and whether you can rationalize spending millions to incentivize high-income earners and profitable corporations to go electric a bit earlier than they might have otherwise done on their own.

People will likewise be divided on whether the new income thresholds for people truly make sense. 

To be eligible for the full $4,000 EV rebate, you can’t earn more than $80,000 individually or $125,000 in a household. 

It will be interesting to see whether a family at that level, already under siege by rising interest rates, housing prices, daycare rates and inflationary hikes to the cost of household goods, can truly afford to buy a $55,000 electric vehicle within their tight budget, even with a $4,000 government rebate.

To be fair, they’ll also likely be eligible for an additional $5,000 in federal rebates, knocking a total of $9,000 off the sticker price right at the dealership. And BC has exempted EVs from the provincial sales tax as well, in an attempt to sweeten the deal.

It’s not clear yet whether this week’s changes have brought BC’s electric vehicle rebate program into the right balance.

For many years it helped wealthy people save a little money on luxury electric vehicles. Now, only families with modest budgets are eligible for rebates, even if they might not be able to afford an EV at all.