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Ontario Premier Dalton McGuinty announces the province's electric vehicle rebate Wednesday in Toronto (Darren Calabrese)
Ontario Premier Dalton McGuinty announces the province's electric vehicle rebate Wednesday in Toronto (Darren Calabrese)

Electric car rebate sparks criticism Add to ...

The Ontario government's plan to offer rebates of up to $10,000 to purchasers of electric vehicles ran into immediate criticism Wednesday from one of the largest auto makers in the province and a leading industry analyst.

"We don't want government deciding winners and losers," Jerry Chenkin, executive vice-president of Honda Canada Inc. said after Ontario Premier Dalton McGuinty announced the rebate program and goal of remaking the vehicle fleet in the province so that one of every 20 vehicles on the road is a plug-in hybrid or battery-powered car or truck.

"This announcement of a $10,000 rebate is creating winners and losers on products that aren't available yet and [on which]nobody knows the real time line," Mr. Chenkin said.

His words were echoed by industry analyst Dennis DesRosiers, president of DesRosiers Automotive Consultants Inc.

"Electric vehicle technologies are an incredibly exciting development in the automotive sector and could be a very significant part of the future of this sector," Mr. DesRosiers wrote in a note to clients Wednesday. "But if it takes a bribe of $10,000 to get a consumer into these products then the technology will never succeed."

Even Toyota Canada Inc., which plans to bring a plug-in hybrid to this country this year for testing, questioned whether the Ontario program makes sense.

"Ultimately, technologies have to succeed on the basis of consumers using their own dollars to vote in favour of the technology," said Stephen Beatty, Toyota Canada's managing director. "I'm not sure they've thought through who that customer is and how those technologies can best be applied."

Mr. McGuinty unveiled the program, which will offer rebates starting at $4,000 as of July 1, 2010, at a Chevrolet dealership in Toronto. He stood beside a silver-green Chevrolet Volt, the extended-range electric car that General Motors Co. will begin selling to consumers in Canada during the second quarter of next year.

"We're at the doorstep of a brave new world," Mr. McGuinty told reporters at the dealership. "This will be the most attractive rebate certainly in North America. It may be the most attractive rebate in the world."

The government has not earmarked a specific amount of funding for the rebates, he said, but Mr. DesRosiers said it could amount to $3.5-billion if 5 per cent of the 7 million vehicles now on Ontario's roads are replaced by subsidized electric vehicles. The length of time the rebates are offered will depend on how the market for these vehicles evolves, Mr. McGuinty said.

Ultimately, he added, Ontario would like auto makers to manufacture electric cars in the province. If residents purchase enough of these vehicles, that will give the province bargaining clout with the auto makers, he added.

"We've just sent up a big, bright, red flare to the auto production industry saying, 'You know what? In Ontario they are really committed and determined to make this a reality.'" Ontario and the federal government share ownership in a 12 per cent stake of General Motors Co.

Neil Macdonald, vice-president of corporate affairs of General Motors of Canada Ltd., said at the news conference that production of the Volt will begin late next year.

"The question for the next 100 years, is who is going to reinvent the automobile," Mr. Macdonald said. "GM is reinventing the automobile."

Ford Motor Co. of Canada Ltd., which will begin offering a battery-electric commercial van for sale next year, applauded the program and said it will help spark sales of such vehicles.

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