Considering electric vehicles for your fleet, but worried about the cost? We’ve got some good news for you.
Since May 2019, the federal government has been offering key incentives that make EVs more accessible for individuals and businesses across Canada.
In this blog, we’ll share details about the incentives, and how EVs may be able to lower overall fleet costs.
What do EV incentives mean for your fleet?
The federal government has the following targets in place to increase EV sales across the country:
- By 2025, 10% of total vehicle sales should be zero-emission
- By 2030, 30% should be zero-emission
- By 2040, 100% should be zero-emission
Currently, EV purchase prices in Canada range from $33,000 all the way up to $214,000(!) for more luxury models. Thankfully, there are many quality EVs available on the lower end of the cost spectrum, making them a more practical investment for businesses—especially when you take the available incentives into account.
3 Key Incentives to Speed Up EV Adoption Across Canada
1. Incentive To Reduce EV Purchase Price
The federal government’s Incentive for Zero Emission Vehicles Program (iZEV) offers up to a $5,000 rebate for battery electric or hydrogen fuel cell vehicles with a manufacturer’s suggested retail price (MSRP) of less than $45,000.
Additionally, businesses can stack this federal EV incentive with those that are active in British Columbia, Quebec, and Ontario:
As part of the BC EV incentive, you can receive:
- $3,000 for the purchase or lease of a new battery electric vehicle.
- $1,500 for the purchase or lease of a plug-in hybrid electric vehicle.
- up to $6,000 for a new, or $3,000 for a used EV when you scrap your current gas or diesel vehicle through the Scrap-It program.
In Quebec, you can receive:
- a purchase or lease rebate of up to $8,000 for a new eligible electric vehicle or plug-in hybrid electric vehicle.
- up to a $600 rebate for installing a home-charging station.
- up to a $5,000 rebate for installing a workplace charging station.
- up to a $4,000 rebate for purchasing an eligible used all-electric vehicle.
While no Ontario EV rebate is currently active at the government level, you can receive:
- $1,000 for the purchase of a used electric vehicle through Plug‘N Drive and Clean Air Partnership.
This opportunity to combine provincial and federal incentives results in significant cost savings for many businesses adding EVs to their fleets.
2. Tax Write-offs on EV Purchases
Canada’s federal EV incentive allows businesses to fully deduct the capital costs of zero-emission vehicles (ZEVs), up to a maximum of $55,000 in the first year of investment.
Of all the EV initiatives in Canada, this rebate is most likely to affect your business directly, aiming to encourage more businesses to convert to zero-emission fleets.
3. Expansion of EV Charging Infrastructure
As of March 2021, there are 13,230 EV chargers at 6,016 public stations across Canada. 2,264 of those public chargers are DC fast chargers, which are capable of fully charging an EV in under an hour.
The federal government has also promised to spend $130 million building EV charging (level 2 or higher) and hydrogen refueling stations across Canada until 2024. This means that drivers will be able to charge or fuel up more conveniently, easing range anxiety and fears of being stranded.
EVs offer lower total cost of ownership
Once you acquire your electric vehicle(s) you’ll likely see savings in total ownership costs. In fact, studies show that electric vehicles have a lower total cost of ownership (TCO) than gas and diesel vehicles.
Here are three areas in which EVs provide cost savings:
1. No Fuel Costs
Even amidst rising electricity costs in some provinces, electricity still costs less than gasoline.
Chart source: 2 Degrees Institute
In addition, the federal carbon tax, originally introduced in April 2019, was updated in December of 2020 to increase to a total of $170 per tonne by 2030. Under today’s level of carbon taxation, Canadians pay about an extra 2.3 cents per litre of gasoline, but this is set to rise to an extra 12 cents per litre in 2022. This tax affects businesses in Alberta, Ontario, Saskatchewan, and Manitoba.
So by adding electric cars to your fleet, you can avoid this extra cost altogether. The savings compound as you add more EVs to your fleet.
Read more: 6 Common Electric Vehicle Myths Debunked
2. Discounted Insurance Rates
EVs can also cut insurance costs. Some companies, such as Aviva, Desjardins, and others, offer “green car discounts” for EV and hybrid vehicles. While your insurance costs are largely affected by the driving behaviour of your fleet over time, there is a possibility to see some savings on the electric vehicles in your fleet.
3. Lower Maintenance Costs
Finally, with no oil to change or valves, gaskets, and spark plugs to repair, EVs are surprisingly low maintenance. They also rely on a regenerative braking system, which reduces brake pad wear. This means less frequent replacements, leading to lower costs.
Higher costs to be aware of
While there are many cost savings benefits associated with EVs, in some areas costs are higher. This, of course, includes the purchase price, which is partially offset by the incentives we mentioned above.
It also includes things like the taxable benefit to a driver. The higher purchase or lease cost of an electric vehicle could increase the standby charge part of the taxable benefit calculation. Currently, there is no offset for the lower operating costs (fuel, maintenance etc.)
Adding EVs to your fleet has never been more affordable, thanks to the available incentives to buy electric cars in Canada. EVs also provide a lower total cost of ownership, and can help promote a sustainable image for your company. And while some costs associated with EVs may be higher, their many benefits mean they’re still a viable option for many fleets across Canada.
Download our white paper E-Fleets Are Coming: How Can You Plan for Change? It discusses the key benefits and challenges associated with EVs in-depth, and provides expert advice on key considerations to make before going electric.