Popularity of electric cars will force governments to alternative
Jan 19, 2010 - Ross Marowits - The Associated
The eventual popularity of electric cars will force governments
to consider alternative revenues as they prepare to wean themselves off fuel taxes,
industry observers say.
Canada's three levels of government share about
$15 billion in taxes from fuel annually. But some of that revenue could be at
risk if consumers turn en masse to plug-in electric or hybrid vehicles.
is being talked about is taxes on electricity, taxes on other modes of transportation
like highway tolls," said Al Cormier of Electric Mobility Canada.
founder of the organization that promotes electric cars says taxation shouldn't
be a major issue for at least five years. It will depend on fuel prices and electric
The industry has forecast that there will be 500,000 plug-in
electric cars in Canada by 2018. That's a small fraction of the 20 million vehicles
on the country's roads today.
HEC business school professor Pierre-Olivier
Pineau said governments have to rethink their tax intake as society looks to rid
itself of its oil consumption habit.
He said the most likely option is
to implement carbon taxes or increase ones already in place in B.C. and Quebec.
Part of the government's tax solution might also involve charging higher
rates to recharge a car than for residential uses.
Existing networks only
charge one price for each household. But "smart grids" that could be available
in a decade would permit variances.
"It's becoming a buzzword and people
think it will change a lot of things," he said.
While increasing electricity
costs to charge cars may reduce the cost advantage of operating electric cars,
University of Montreal professor Normand Mousseau said consumers ultimately have
"In the end, we'll have to pay for the roads one way or the other,"
Growing interest in electric cars has Canada's provincial and
municipal electric utilities conducting pilot projects to get ready.
recently announced a partnership with Mitsubishi to test the performance of 50
plug-in i-MiEV electric cars in the town of Boucherville over the next three years.
The $4.5-million project provides the public utility with another window
on the electric car market. It is also testing a Ford Escape hybrid and a hybrid
pick-up truck, while batteries developed by its TM4 subsidiary are being tested
overseas in vehicles being developed by Indian carmaker Tata.
Stacey Masson said the Mitsubishi project is part of the energy giant's overall
strategy and will help it evaluate the impact of electric vehicles on its vast
"We have the power, we just need to see how it will impact our
grid and our network so we can plan what kind of usage people will make of it
so we can plan for the future," she said in an interview.
B.C. Hydro launched
its own trial of the cars in November. Utility employees are driving two such
The utility is also awaiting delivery of the Nissan Leaf in 2011
and is in discussion with other car manufacturers.
"This is one piece of
the overall project for us into figuring out what this will look like for our
province in the future," said spokeswoman Simi Heer.
She said preliminary
estimates suggest at least 10 per cent of new vehicles purchased by 2025 could
be electric plug-ins.
In Quebec, the cars will be distributed to selected
local businesses and the municipality. A private partnership will establish charge
Toronto and Calgary are also looking to test electric cars.
vehicles are seen as part of the solution to global warming as they emit no greenhouse
They cost little to charge. Based on B.C. residential electricity
rate, Mitsubishi's model costs about $1.12 for a promised 120 kilometres, about
one quarter the fuel costs for a Smart car.
However, the hefty current
sticker price of more than $40,000 for plug-ins could limit demand.
says electric cars aren't a real solution in the medium-term because of their
cost and their technological unreliability.
He said cheaper options for
utilities to pursue are public transit and lighter cars that use available technology.
"In terms of energy policy, (and) environmental policy the priority should
not be given to electric cars," he said.
Mousseau described Hydro-Quebec's
electric car strategy as "dismal" and not ambitious enough.
"The best batteries
in the world have been developed right here and it took them quite a bit of time
to realize the importance of these batteries," he said.