A Canadian Province Is About To Find Out What Happens When A Strengthened EV Mandate Clashes With Reduced Rebates

Consumer demand is a fickle thing. Constantly influenced by price, proximity, product ease, general fear of the economy, culture war nonsense, and all sorts of other randomness, it can be hard to predict just where the general public will spend its money next. While governments can attempt to influence consumer behavior, demand is still what gets things sold. What will happen to EV demand as the Canadian province of British Columbia cuts EV rebates shortly after strengthening its EV mandate?

At the same time, used combustion-powered car prices are slowly settling into a new normal, but used EV prices are, well, not doing so hot. Of course, this shouldn’t be much of a surprise, but some fresh data just came out of the oven for your and our perusal, so it’d feel foolish not to cover it.

Oh, and while Ford cranks up the retro knob on the Mustang, Stellantis finds itself on the other end of a lawsuit filed by some seriously peeved investors. It’s all in today’s edition of The Morning Dump.

Oh, Canada

For as much fucking around as everyone’s done with estimating the rate of EV adoption, the Canadian province of British Columbia is about to find out what happens to consumer demand when EV rebates are greatly reduced and a sales-focused EV mandate ramps up almost simultaneously. Now, one of those two measures on its own could have kept the EV mandate easily achievable without any doubt, at least for the immediate future, but both together could make things difficult for consumers who are already financially squeezed in all manner of directions. See, British Columbia has a zero-emissions vehicle mandate that requires 26 percent of all light-duty vehicles sold in the province in 2026 to be ZEVs. That number ramps up to 90 percent in 2030, followed by 100 percent in 2035.

Without even getting into the problems with the second and third key numbers, let’s start with 2026. In 2023, ZEVs made up almost 21 percent of light-duty vehicles sold in the province, so we’re looking at increasing market share by five percent in three years to not run afoul of the mandate. While that might seem like a small gap, five percent more market share is huge, especially when electric vehicle incentives are being dramatically tightened. As per Automotive News Canada:

The changes in mid-June to B.C.’s Go Electric Passenger Vehicle Rebate Program lowered the eligibility price ceiling for zero-emission cars to $50,000 from $55,000. Utility vehicles were also reclassified as “cars,” meaning fewer qualify for rebates.

That leaves pickups and minivans in the “large ZEV” category, in which vehicles with sticker prices up to $70,000 are eligible for rebates of up to $4,000 each.

The result? Nearly 75 percent of EVs previously eligible for provincial rebates in British Columbia aren’t anymore, and while converting loonies to greenbacks doesn’t always work out apples-to-apples because of nuance in the car industry, here’s what that means in American dollars. Any car or crossover over about $36,442 USD won’t qualify for the equivalent of up to $2,915 USD or so in provincial rebates, depending on vehicle and income. The Canadian federal rebate of up to $5,000, or $3,644 USD at current conversion rates, remains in effect on cars with a base MSRP of less than $55,000 Canadian and an as-equipped MSRP of less than $65,000 Canadian, and SUVs and trucks with a base MSRP of less than $60,000 Canadian and an as-equipped MSRP of less than $70,000 Canadian, but if you’re thinking those price caps and incentives pale in comparison to what America has to offer, even in states without EV mandates, you aren’t wrong.

Now, here’s the big catch: If ZEV sales fail to meet EV mandate targets, and automakers fail to purchase available credits, they’ll be fined $20,000 per combustion-powered car over the line. Canadian dollars, but still. So, what could happen? Well, automakers could restrict the supply of new ICE vehicles in B.C. to meet the EV mandate if targets aren’t met. Obviously, people buying Aston Martins and Porsche 911 GT3s won’t care too much over another $20,000 surcharge or so, but restrictions could have intriguing effects on people looking for, say, Civics and Corollas. Instead of buying new, they might buy ex-demonstrators from other provinces without EV mandates, theoretically side-stepping government meddling. Of course, there’s also a slim chance everything works alright and EV demand is met, but let’s just see how this goes.

Welcome To The New Normal

With all the dust having firmly settled on second-quarter used car transactions, Edmunds has the goods when it comes to figures on retail sales. As you might expect, there’s good and somewhat expected news — prices are absolutely down and inventory levels are looking good.

Used vehicle values fell by 6.8% year over year from $29,742 in Q2 2023 to $27,472 in Q2 2024. This decline was paired with a negligible increase in turnover on dealership lots: The average days to turn — the number of days a vehicle sits on a dealership lot before being sold — for used vehicles was 35 days in Q2 2024 compared to 34 days in Q2 2023.

However, depreciation isn’t hitting ever used vehicle segment equally. The average used EV transaction price is down a whopping 20.5 percent year-over-year, yet still sit about $3,400 higher than the average used combustion-powered car. The big winner? Hybrids. The average used hybrid and PHEV transaction price is down only 5.1 percent year-over-year, beating combustion car value retention. Now that’s a dub.

It’ll be a slow process, watching new vehicle incentives influence used car values and vice versa, but pricing is getting better for people looking to buy. Will we ever see the deals we saw in 2019 again? Probably not, but that’s the way it goes sometimes. We’re still running low on lease returns, so expect that void to have knock-on effects for a while to come.

Get It In The Good Color

Alright, so the Ford Mustang 60th Anniversary Edition isn’t exactly new, but Ford’s already updating the package with a beautiful new shade of blue. Officially dubbed Brittany Blue, it’s a color first used on 1967 Mustangs that scratches that retro itch. Looks fantastic, doesn’t it? It’s a shame it’ll only come on a few of the 1,965 60th Anniversary Edition cars being built, because it just feels so on-trend right now.

Oh, and that’s not the only new thing coming to Mustangs ASAP. The latest heritage gauge cluster skin to roll out through an over-the-air update is a throwback to the 1999 to 2001 New Edge Mustang SVT Cobra, and dammit, it hits the nostalgia button just about perfectly. If you own an S650 Mustang, expect this cluster to appear on your dashboard starting at midnight ET on Aug. 17, provided you let the over-the-air update do its thing.

A Group Of Investors Are Suing Stellantis

Hell hath no fury like an investor who feels like they got the raw end of a deal, and that fury is currently aimed directly at Stellantis’ dome. That’s right, as Reuters reports, a group of shareholders are suing Stellantis lawsuit, naming CEO Carlos Tavares personally in the suit, for alleged fraud around concealing weaknesses.

The complaint filed on Thursday in U.S. District Court in Manhattan said Stellantis artificially inflated its stock price for much of 2024 by making “overwhelmingly positive” assessments about inventories, pricing power, new products and operating margin.

Shareholders said the truth came out on July 25 when Stellantis said first-half adjusted operating income fell 40 percent to 8.46 billion euros ($9.28 billion), below the 8.85 billion euros that analysts expected.

Part of me feels like this could’ve been mitigated if some of the shareholders involved checked in with retail, but that’s just me. Look, it’s no secret that Stellantis is having trouble shifting inventory, so while the suit accuses the firm of fraud, it’s also not hard to look outside and see if the sky is clear, overcast, or raining. As for what Stellantis thinks of this whole situation, well, it’s about what you’d expect.

“This lawsuit is without merit and the company intends to vigorously defend itself,” Stellantis said in an emailed statement to Reuters.

Is this just a case of shareholders getting pissy, or is there some merit here? That’s most likely a question that’s up to the U.S. District Court.

What I’m Listening To While Writing TMD

Does anyone else get the feeling that if you were a Toronto-based indie musician in the 2000s and you turned up with an exquisite homemade coleslaw, you could be a member of Broken Social Scene? The group may be known as a massive rotating ensemble that’s grown to 27 members over the years (albeit not simultaneously), but it’s also one of the most important bands of the past 25 years, full-stop. Imagine indie rock legends banding together to make pop music that’s, on the whole, unpretentious, brilliantly layered, and a breeze to listen to. Even when the song’s written in an unusual time signature. It’s “7/4 (Shoreline)” for your perusal. Welcome to the other side of Toronto, the part you won’t see in a Drake video.

The Big Question

I’m not a betting man, but what do you reckon the odds are that some of these EV mandates will be walked back over the coming years?

(Photo credits: Tesla, Ford, Dodge)