You might have heard about a latest U.S. report suggesting that electrical automobile gross sales have been the truth is lagging — that once-waitlisted vehicles have been immediately sitting on dealership tons whereas their gas-powered forbearers handed them by.

And whereas this report has been extensively circulated and referenced within the information, together with right here in Canada, there’s a significant issue with the conclusion many are drawing .

Removed from being unpopular, EVs proceed to surge in gross sales, and sure, you’ll nonetheless battle to seek out one in Canada.

The newest examine on Canadian EV stock, launched earlier this 12 months with information from 2022, discovered that, whereas gross sales for electrical automobiles have been rising throughout the nation, stock at dealerships was at an all-time low. Simply ask any Canadian who’s been available on the market for an EV these days.

However the American examine does impart some necessary classes: specifically, that EVs have upended the normal dealership mannequin that has dominated automotive gross sales for many years. And that the U.S.’s EV rebate is much less efficient than Canada’s.

To start with — and that is key — made-to-order vehicles corresponding to Tesla and Rivian have been excluded from that examine’s calculation, as they don’t sit on dealership tons. That is no small omission. Tesla alone accounted for 65 per cent of all U.S. EV gross sales in 2022. So, not less than two-thirds of all electrical automobile gross sales in America have been omitted from the evaluation. Once you take a look at precise gross sales moderately than stock (a greater measure of true demand), American EV gross sales are at an all-time excessive, up 50 per cent 12 months on 12 months within the second quarter of 2023.

What’s extra, America’s EV tax credit score is basically protectionist, designed not simply to incentivize patrons however to spur an American EV trade by requiring that ultimate meeting of eligible vehicles occurs within the U.S. The logic is straightforward sufficient: you need to promote extra EVs in America? Construct them right here.

Sadly, this excludes many common EV fashions.

The Hyundai Kona Electrical and the Ioniq 5, Canada’s third and fourth bestselling EVs in 2022 are each excluded. The as soon as pioneering Nissan Leaf is ineligible. Even the Ford Mach-E, regardless of its American maker, solely qualifies for 50 per cent of the EV tax credit score.

An American-built Tesla, alternatively, is eligible for the complete $7,500 U.S. rebate, and so one might count on U.S. patrons to gravitate towards the disruptive carmaker over manufacturers for which no rebate is obtainable. And that’s precisely what is going on. Tesla’s international gross sales went up 37 per cent within the first quarter of 2023 (with the favored Mannequin Y rising by 79 per cent). Within the second quarter, the automaker’s gross sales shot up one other 10 per cent — the identical quarter coated by the examine above, which, once more, excludes Tesla.

Whereas America’s larger tax credit score has been nice information for Elon Musk, the U.S. examine means that, if something, it’s up to now been much less efficient than Canada’s less complicated, much less conditional $5,000 rebate. And but Canada’s auto foyer has been asking the federal authorities to go increased to maintain up with the U.S. The fact is kind of the other: we’re now seeing that America’s coverage isn’t maintaining with Canada’s.

A good however open rebate is the higher measure. It’s more practical at attaining its purpose of getting extra EVs on the highway at a decrease value, and it’s higher for patrons because it will increase selection and thus competitors. And competitors, as we’ve seen with Tesla’s and Ford’s latest worth cuts, is what actually drives down prices for shoppers.

That’s why Canada’s forthcoming EV gross sales regulation — one other bugbear of the auto trade — is equally good coverage. A latest evaluation by Environmental Defence discovered that the measure, which requires automakers to promote a rising share of electrical automobiles, would minimize EV costs by 20 per cent as automakers are pressured to promote extra inexpensive fashions to fulfill the necessities.

For years, B.C. and Quebec have provided drivers demand-incentivizing EV rebates whereas boosting provide with their very own EV gross sales laws. Each provinces proceed to steer the remainder of Canada in electrical automotive gross sales by a substantial margin.

We needn’t look south of the border for solutions after we’re already doing issues higher up right here.

This put up was coauthored by Trevor Melanson and initially appeared in the Star.