New Report: EV Mandates Risk Economic Disruption, Deepen Inequality

Yahoo

30-03-2025

Current policies may benefit Tesla and increase vulnerability to United States
VANCOUVER, British Columbia, March 30, 2025 (GLOBE NEWSWIRE) -- A new report commissioned by the Energy Futures Institute, Are EV Mandates and Market Reality on a Collision Course?, warns that government-mandated electric vehicle (EV) sales targets in British Columbia and Canada could destabilize markets, reduce consumer choice, drive up costs and benefit car companies like Tesla.
'The push for EV mandates ignores fundamental market realities,' said policy researcher Professor Jerome Gessaroli, who authored the report. 'These policies force automakers to sell electric vehicles regardless of demand or buy credits from competitors like Tesla, likely leading to financial losses, higher vehicle prices, and fewer choices for consumers. The result is an artificial market distortion that makes it more expensive for people to get the vehicles they need, disproportionately impacting lower income people. A more flexible approach to emissions reduction is required.'
Barry Penner, Chair of the Energy Futures Institute, noted that while the government's EV mandates aim to accelerate electrification, they may instead funnel millions of dollars into the pockets of Tesla and Elon Musk—at the expense of Canadians.
'These mandates could end up directing consumer dollars straight to Tesla as the dominant EV manufacturer with vehicles currently available in Canada,' said Penner. 'That would be an unacceptable consequence of forcing the market in one direction, rather than allowing competition and innovation to shape the future of transportation.'
Key Findings:
EV Sales Depend on Subsidies: Sales have proven highly sensitive to purchase incentives. Reductions in government support in British Columbia, Quebec and at the national level have led to significant declines in adoption, with EV sales dropping to 18% of new vehicle sales last month in BC from about 23% last year.
Market Distortions: If consumer demand lags behind government mandates, automakers may be forced to discount EVs heavily or reduce production of profitable gas-powered vehicles—causing losses, shortages and price hikes for both new and used vehicles.
Infrastructure Gaps: Public charging remains costly and insufficient. In Metro Vancouver, estimates suggest charging infrastructure investments could reach $2.9 billion by 2050.
Policy and Supply Chain Uncertainty: Recent shifts in U.S. tariffs and EV policies have created an unpredictable business climate, leading some companies to pause or cancel planned EV manufacturing projects in Canada.
Worsening Income Inequality:
Affordability: EVs remain about $8,000 more expensive upfront, limiting access for lower-income buyers. Meanwhile, subsidies disproportionately benefit higher-income households earning up to $100,000.
Charging Access: Residents without home charging pay up to $0.39/kWh at public stations—nearly five times the $0.08/kWh rate currently available to BC Hydro customers with home chargers who opt for time-of-use rates.
Professor Gessaroli cautioned that 'government intervention at this scale rarely comes without consequences. By distorting the auto market, mandates will drive up costs for both electric and gas-powered vehicles, hurting consumers who may not be ready or able to transition to an EV.'
Penner also warned that British Columbia's growing reliance on electricity imports from the United States increases vulnerability to capricious actions from President Donald Trump.
'Since 2023, B.C. has been importing roughly 20% of its electricity needs from the U.S. due to a lack of domestic generation. If fully implemented, EV mandates will increase electricity demand by the equivalent of two more Site C dams worth of power, potentially increasing our dependence on imported energy, leaving BC in a precarious position,' Penner explained. 'With trade relations at an all-time low, it's dangerous to assume we'll always have access to affordable U.S. electricity. We need a plan that strengthens B.C.'s energy security, not makes us more vulnerable.'
Recommendations:
The report urges policymakers to replace rigid EV sales mandates with more flexible, emissions-based targets. This approach would allow market forces and technological advancements to drive cleaner transportation solutions while mitigating economic disruptions.
'Encouraging emissions reductions without dictating specific technologies will lead to better outcomes for both the environment and the economy,' said Professor Gessaroli. 'Policymakers should prioritize affordability, energy security, and consumer choice over one-size-fits-all mandates.'
Media ContactSimon Turner, ph. (672) [e-mail]
Background:
Jerome Gessaroli
Jerome Gessaroli is a senior fellow at the Macdonald Laurier Institute and leads the Sound Economic Policy Project. He writes on economic and environmental matters, from a market-based principles perspective. Jerome teaches full-time at the British Columbia Institute of Technology's School of Business, courses in corporate finance, security analysis, and advanced finance. He was also a visiting lecturer at Simon Fraser University's Beedie School of Business, teaching in their undergraduate and executive MBA programs. Jerome is the lead Canadian co-author of 4 editions of the finance textbook, Financial Management Theory and Practice. He holds a BA in Political Science and an MBA from the Sauder School of Business, both from the University of British Columbia. Prior to teaching, he worked in the securities industry. Jerome also has international business experience, having worked for one of Canada's largest industrial R&D companies, developing overseas business opportunities in China, Hong Kong, Singapore, and India.
Barry Penner, KC
Barry Penner served as BC's Minister of Environment, Minister of Aboriginal Relations and Attorney General during his four terms as a MLA. Penner represented Chilliwack in the BC Legislature from 1996 to 2012. During this time, he also served as both President and Vice President for the Pacific Northwest Economic Region (PNWER) and chaired a number of Legislative Committees. As Minister of Environment, Penner introduced BC's first climate action plan, which included North America's first revenue-neutral carbon tax.
Penner was named Chair for the Energy Futures Institute in December 2023.
Energy Futures Institute
The Energy Futures Institute is a Resource Works-sponsored project bringing a fresh perspective to discussions surrounding the future of energy in British Columbia.
Energy Futures has been exploring some of the greatest challenges facing British Columbia's energy security, affordability and independence, working to answer the big questions on how we meet BC's growing energy demand while protecting our environment, not just today but for the coming decades and century ahead.
Resource Works
Resource Works is a public-interest advocacy and communications not-for-profit organization based in Vancouver, British Columbia. Their mission is to reignite the promise of Canada's economic future by leading respectful, inclusive and fact-based dialogue on natural resource development.
Resource Works helps show how resources have 'worked' for citizens in the past and how they can continue to do so in a new era defined by environmental responsibility and reconciliation. We communicate the importance of resource sectors to personal well-being and opportunity, demonstrating how responsible development creates jobs and incomes, both directly and indirectly, while maintaining a clean and healthy environment.Sign in to access your portfolio