GUNTER: Electric vehicles leave taxpayers on the hook
I’ve always believed the difference between the cost of a government subsidy and the value of the project it is subsidizing is nothing more than a political premium – the price the government of the day is willing to pay to bring an uneconomical project to a riding or region the ruling party feels is important to its re-election.
Economics has nothing to do with it.
Still, I’ve never seen a political premium the size of the one the Trudeau Liberals gave to Volkswagen to build an electric-vehicle battery plant in St. Thomas, Ont.: $13 billion in subsidies for a $7-billion plant.
Pretty sweet. If you’re Volkswagen. Not so sweet if you’re a taxpayer.
Of course, VW’s ridiculous sweetheart deal from Ottawa and the Ontario provincial government was bound to make their rival carmakers jealous. Evidence of that came Monday when Stellantis, parent company of Chrysler, announced it would stop construction on its $5-billion battery plant in Windsor until Ottawa and Queen’s Park sweetened Stellantis’ political premium.
The subsidy war could end up costing Canadian taxpayers far more than the initial $6-billion premium.
Welcome to the cult of the EV (electric vehicle). No price is too high to pay (with your money) for the moral piety that comes from politicians associating themselves with EVs.
On an economic level, EVs don’t make much sense.
Not only are there giant subsidies for the manufacture of them, there are huge subsidies to consumers who buy them. In some provinces, those taxpayer-funded incentives run to $8,000 or more, per vehicle.
There is also the huge cost to taxpayers to install charging stations in remote locations. Oil companies may find it profitable to build gas stations every couple of hundred kilometres. But it doesn’t pay to erect charging stations every 50 kilometres across, say, northern Ontario. That means EV-obsessed politicians have to pony up more of your money.
I’m also betting that when consumers are reluctant to jump aboard the EV bandwagon, politicians will start paying for home charging stations, too, as well as upgrades to local power grids and maybe even the construction of new power plants, too.
By the way, just where are all the new power plants that will fuel this EV revolution? To recharge all the EVs the Trudeau government has mandated by 2035 would require at least six new nuclear power plants. The average nuke generator takes 12 years from design to completion, which means there should be a minimum of six leaving the drawing board right now.
There are none.
Moreover, the typical subsidy for a nuclear power station is in excess of $2 billion. That’s another huge chunk of taxpayer change to make this EV cult a reality.
And because the average EV buyer now and for the foreseeable future has an income of $100,000 a year or more, compared to about $60,000 for the average internal-combustion vehicle buyer, all these tens of billions in tax dollars amount to a huge transfer of wealth from middle- and lower-income Canadians to their upper-income countrymen.
I haven’t even mentioned infrastructure, yet.
In Britain and the United States, owners of some older parkades have begun banning EVs. They weight about 40 per cent more than comparable ICE (internal combustion engine) vehicles because of their mega-batteries, and the fear of some insurers and landlords is that older concrete structures won’t be able to take the added weight.
More frequent repairs and replacements of surfaces and roadbeds on streets and highways will be necessary, too, as the weighty EVs wear down the asphalt more rapidly.
Even if EVs were far better for the environment (debateable), the cost of converting to an all-EV fleet makes that goal prohibitive.