Point-of-sale incentives remain key to reaching broader adoption and climate goals

By Blair Qualey

The New Car Dealers of BC are proud to play an active role in transitioning consumers to zero-emission vehicles (ZEV)—a key component of federal and provincial government climate change strategies. However, we are concerned about recent comments by the prime minister suggesting he is not committed to point of purchase incentives beyond 2025, despite the fact that they have been critical in advancing ZEV adoption.

Last year, the provincial government accelerated mandated targets for ZEVs, requiring automakers to meet an escalating annual percentage of new light-duty ZEV sales and leases, with an ultimate target of 100 per cent by 2035—and the federal government followed suit.

In B.C., electric vehicles made up almost 23 per cent of all new light-duty passenger vehicles sold in 2023, the highest percentage for any province or territory in Canada on a per-capita basis. For many ZEV consumers, the two rebate programs (up to $5,000 from the federal iZEV program and $4,000 from the CleanBC Go Electric Vehicle Rebate program) are significant.

The 22,500 rebates processed through the CleanBC Go Electric program last year were an all-time high. On the national level, federal incentives supported the purchase of about 146,000 ZEVs in 2023, up 150 per cent from the roughly 58,000 vehicles that received rebates the year before.

In spite of this success, the prime minister says he will not commit to the federal incentive program beyond March 2025.

As we and our federal association have communicated publicly and to government for some time,

incentives that fuel the transition to clean-energy vehicles require a long-term commitment. Early adopters didn’t require a great deal of convincing, whereas the broader consumer population will, for reasons including price, range anxiety and charging considerations, especially if they live in remote areas where charging infrastructure is limited.

It’s equally puzzling that the prime minister’s non-committal response comes as he doubles down on his government’s carbon tax and sticks with ZEV mandated targets. If you make a policy choice,  you should be prepared to support consumers to make those choices until it is in their economic interest to do so.

Incentives don’t need to be in place forever but should remain until there’s more price parity between ZEVs and internal combustible vehicles. By its own admission, when the federal government rolled out its mandates, they indicated price parity will probably not be achieved until the early 2030s.

If anything, given what is anticipated to be an increasingly challenging go-forward process of ZEV adoption, increasing the size of rebates would seem more logical.

A recent poll by Research Co. highlights that most British Columbians support the concept of transitioning to electric vehicles. However, only 37 per cent of British Columbians think the goal of 100 per cent by 2025 is achievable, with more than half suggesting they would be less likely to purchase an electric vehicle because they are too expensive compared to non-electric options.

Now is not the time to bow out. Much more work is required to overcome the challenges and ensure we collectively achieve success—fostering a cleaner, greener future while continuing to increase sales and boosting our economy.

Blair Qualey is president and CEO of the New Car Dealers Association of BC.

By Blair Qualey

After navigating a rocky road through the pandemic and post-pandemic, February 2024 stands tall as a perfect encapsulation of the state of the automotive industry in Canada — and things are looking good. The results are in, and light vehicle sales of more than 129,000 shattered records, making February 2024 a record-breaking month that saw a whopping 24.4% increase over February 2023.

Pent-up demand for new vehicles and a sorely missed sense of financial freedom following the COVID-19 pandemic tell a tale of recovery and the remarkable adaptability of the automotive industry. One cannot overlook the role of demand stemming from the “lost sales” of the past four years, but despite Canada grappling with a recession throughout the past year, the market has achieved an impressive 16 consecutive months of year-over-year growth.

The Seasonally Adjusted Annual Rate (SAAR) for February hit 2.11 million units, a peak not witnessed since January 2018. The Canadian automotive market has not only weathered the storms of recent times but has emerged stronger than ever — especially for the month of February.

Andrew King, Managing Partner of the New Car Dealers Association of Canada (DAC), captures the essence of the moment, stating, “February 2024 sales tell us that some of the hurdles of recent years – and specifically the supply constraints of new vehicles – are now well and truly in the rear-view mirror.”

The pandemic had created supply issues both through plant shutdowns and a surge in demand for electronics that led the auto industry to have a shortfall of semiconductors. The disruptions led to a shortage of supply and a surge in pricing as automakers focused on their priciest and most profitable models. However, production is expected to finally return to pre-pandemic levels this year.

As we head into the traditional spring sales season, it comes with the anticipation of whether this trend will continue to grow. While a record-breaking February is certainly auspicious, the next few months will require a close eye to accurately gauge just how long pent-up demand can remain the dominant market dynamic — especially in the face of rising vehicle prices, inflation, and high-interest rates. The spring season will also provide valuable insights into the long-term stability of this resurgence and our industry’s ability to navigate ever evolving and unpredictable economic landscapes.

Even amidst a per capita recession, Canadians’ appetite for automobiles remains strong, proving that the automotive sector is not just a market but a resilient cornerstone of our economy. The economic world isn’t the same as it was before the pandemic, and the automotive industry’s ability to turn challenges into opportunities is more important than ever.

As we celebrate the most recent sales results, we look ahead with optimism, knowing that the automotive industry, a fundamental pillar of Canadian economic vitality, is well-equipped to navigate the road ahead.

Speaking of post-pandemic celebrations, we’re on the homestretch leading up to the Vancouver International Auto Show, happening on March 20-24 at the Vancouver Convention Centre! For more on the show, including ticket information, please head to: www.VancouverInternationalAutoShow.com.

Blair Qualey is President and CEO of the New Car Dealers Association of BC. You can email him at [email protected].

By Blair Qualey

Franchised new car dealerships across British Columbia have a staggering impact on the province’s economic landscape. As I’ve previously discussed in this column space, even when facing myriad challenges and supply chain issues, a 2023 study suggests BC’s New Car Dealers generated a remarkable $17 billion in retail activity in 2022, contributing $286 million in tax revenue and $775 million in total tax revenue for all levels of government. While this is certainly impressive, it’s important to note that we’re also making waves in the social landscape, driving impactful changes in communities, and supporting charitable causes.

These efforts begin to take form at the Annual Industry Preview Gala at the Vancouver International Auto Show, which is an event that brings dealers, elected officials and others who share our appreciation for everything automotive together to raise funds for New Car Dealers Foundation of BC’s initiatives. While this event is a great chance for members to engage with each other while viewing the latest offerings from global manufacturers, they contribute generously to the Foundation through their participation in specific Association events throughout the year.

At the heart of this community effort lies the New Car Dealers Foundation of BC. Fostering change and innovation starts with education, and the Foundation has showcased a remarkable dedication to these efforts with CarCareerBC grants and scholarships. The CarCareerBC Grant Program, for instance, is an endowment fund built on contributions that provide financial support towards the cost of tuition and books for recipients enrolled in applicable apprenticeship, training, or education – for those pursuing a career in the industry.

Beneficiaries include Georgian College, University of BC, Simon Fraser University, University of Fraser Valley, College of New Caledonia, Coast Mountain College, Kwantlen University, University of Victoria, Vancouver Island University, Skills BC Canada, Thompson River University, Okanagan College, Vancouver Community College, and BCIT.

But it doesn’t stop there. The foundation’s commitment expands beyond this mission, and actively supports various charities throughout BC where local dealers are involved. Contributions from the Foundation include Special Olympics BC (SOBC), where New Car Dealers Association Members proudly stand tall as the largest single financial supporter. These contributions underscore the industry’s commitment to playing an active role in fostering education, inclusivity, and community welfare.

Since 1984, the New Car Dealers Association of BC has been committed to supporting Special Olympics BC through the New Car Dealers Foundation of BC, and has raised over $5.4 million to support SOBC’s life-changing year-round sport programs for people with intellectual disabilities, and the empowering work of the New Car Dealers Foundation.

We’re very excited for the long-awaited return of the Vancouver International Auto Show. While the showcasing of innovation, exciting new models, emerging technological advances, and sneak peeks at upcoming cars are more than enough reasons to look forward to the event, the gathering of industry leaders for the Annual Industry Preview Gala is what makes the above possible. It’s wonderful to see what can be accomplished when we work together to help promote and support our industry’s future pioneers.

Speaking of which, we’re only a couple of weeks away from the big event, happening on March 20-24 at the Vancouver Convention Centre! For more on the show, including ticket information, please head to: www.VancouverInternationalAutoShow.com.

For more information and to stay updated on these impactful initiatives, visit the New Car Dealers Association of BC’s website. If you have any questions or thoughts to share, feel free to email me at [email protected].

By Blair Qualey

The provincial government recently released Budget 2024, and while the focus was largely on the issue of affordability facing British Columbians, it does not extend to auto consumers — today or in the future.

Two areas of concern that we believe require action include the New Car Luxury Tax and the cost of zero-emission vehicles (ZEVs), and how that relates to the mandated targets requiring automakers to meet an escalating annual percentage of new light-duty ZEV sales and leases.

Beginning with the New Car Luxury Tax — introduced in 1997 with the aim of targeting high-end vehicle buyers — which has not been adjusted for inflation for several years. As a result, the tax kicks in at a $55,000 threshold at the same time the average cost of a new vehicle in Canada exceeds $66,000. Where in decades past a $55,000 price tag may have represented a luxury vehicle, clearly that is no longer the case. Many Canadians simply want a decent, reliable vehicle that is affordable in the form of practical vans, SUVs for family activities, or pickup trucks that may be essential for work or just part of the reality of living in a rural or remote community. New Car Dealers have consistently advocated for raising the threshold to reflect the realities of today and eventually eliminating the tax, as it adds an unnecessary layer of financial burden on residents who are increasingly grappling with the high cost of living.

Another area of significant concern is the mandated targets associated with its Zero Emission Vehicle legislation. As ZEVs grow in both consumer demand and industry production levels, the mandated targets require automakers to meet an escalating annual percentage of new light-duty ZEVs sales and leases – reaching 26% of light-duty vehicle sales by 2026, 90% by 2030, and 100% by 2035. While the initial mandated target is within reach, the longer-term implications are of greater concern. Convincing early adopters was one thing, but the broader consumer base remains hesitant, primarily due to price concerns, range anxiety, and charging considerations — especially in remote areas with limited infrastructure and colder weather.

As proud administrators of the CleanBC Go Electric Passenger Vehicle Rebate Program since 2011, we have forged a strong partnership with the province, and one that has played a crucial role in supporting ZEV adoption. However, the future demands ongoing and predictable funding to support initiatives such as rebates, to make ZEVs affordable for the masses. There is also the issue of fast charging infrastructure and ensuring access is developed to meet current and future demand, especially if targeted mandates are to be met. While Budget 2024 committed $30 million to bolster public charging infrastructure, we believe a commitment for significant and ongoing investment is required.

BC’s New Car Dealers are eager to be part of the solution, and to achieve this, we will continue advocating for policies and funding decisions that encourage consumer spending, support job creation, and incentivize consumers to embrace the changing automotive landscape. But we can’t do it alone. Let’s stand united in these efforts and drive positive change together.

In closing, in a matter of days the Vancouver International Auto Show will make its long-awaited return to the Vancouver Convention Center, so don’t forget to mark your calendar for the March 20-24 event. For more information, including ticket details, read more here.

Blair Qualey is President and CEO of the New Car Dealers Association of BC. You can email him at [email protected].

By Blair Qualey

As most people will appreciate, 2022 was a year in which many industries started their climb back from the COVID pandemic and the automotive sector was no different, facing a shortage of computer chips and subsequent supply chain issues.

And now, final 2023 year-end results reveal a positive return to form.

Our sector experienced an11.8% surge in new light vehicle sales in Canada, due in no small part to the continued dominance of light trucks, which account for a record 85.8% market share. The perennial champion, Ford’s F-Series trucks, showcased extraordinary numbers, selling 123,267 units in 2023 – a 7.4% increase from the previous year. This marks a staggeringly impressive 14th consecutive year as Canada’s top-selling vehicle. Not far behind was the RAM series of pickups, securing a solid second place with steady sales, while the Toyota RAV4 jumped a remarkable 33.6%, closing the gap at third place. The GM Sierra and Silverado pickups rounded out the top 5, boasting combined sales exceeding 112,000+ units. Canadians love their trucks, this much is clear. Andrew King, Managing Partner at DesRosiers Automotive Consultants (DAC), remarked on the ongoing trend favoring light trucks, emphasizing that even the best-selling passenger cars only achieved a fraction of the top trucks’ volume.

Following that, let’s take a look at the passenger car sector. The ever-popular Toyota Corolla held onto its lead with 28,260 units sold, with the Honda Civic not far behind. Another vehicle to note is the Mazda 3, which demonstrated a substantial 35.3% sales increase, securing fifth place in this category.

2023 was a strong year across the board in Canada, with the overall market witnessing a substantial increase of 175,000 units in 2023. Nearly every vehicle segment saw increased sales over 2022, especially the compact SUV — which maintained its status as Canada’s highest volume segment. Even the often-unpredictable luxury sports car segment recorded a 48.2% sales increase. Again, while the numbers are very positive, they need to be taken into context as they are being compared against a previous year in which there were ongoing challenges in the sector.

In British Columbia, one positive trend was the continued increase in zero emission vehicle adoption. As of December 31, 2023, British Columbia ZEVs representing an encouraging 22.91% of all new light-duty vehicle sales. Today, there are more than 145,000 ZEVs travelling BC’s roadways.

Of prime importance to New Car Dealers and their customers is the ongoing commitment to the Clean BC Go Electric Vehicle Rebate Program which we administer on behalf of the province and

makes ZEVs more affordable. In 2023, there were more than 22,500 processed rebates – an all-time high and compares to approximately 10,000 the year previous.

It’s clear that the automotive sector is making its return from the post-pandemic funk, and we know 2024 will be even more impressive.

For the latest vehicle models across most major brands, I hope that readers will attend the long-awaited return of the Vancouver International Auto Show, at the Vancouver Convention Centre from March 21-24, 2024. Featuring over 200 vehicles, including luxury supercars and the EV and PHEV Test Drive Experience, attendees will enjoy 200,000+ square feet of innovation, performance, and artistry. Read more here.

Blair Qualey is President and CEO of the New Car Dealers Association of BC. You can email him at [email protected]