RESPONSES TO INTENTIONS PAPER - Province of British Columbia
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RESPONSES TO INTENTIONS PAPER
“Clean Transportation: Building a Clean Growth Future for British Columbia”
August 24, 2018
1. SUMMARY
As a company whose mission is to accelerate the world’s transition to sustainable energy,
Tesla generally supports the proposals contained in the Government of British Columbia’s
“Intentions Paper” on clean transportation.
Increasing Zero Emission Vehicle (ZEV) adoption rates requires policy action in three areas:
demand-side policy to increase consumer awareness and to shift purchasing behavior
towards cleaner vehicles; supply-side policy to maximize consumer choice and access to ZEV
vehicles while shifting producer behaviour towards cleaner vehicles; and infrastructure policy
to ensure consumers are able to charge their vehicles. While the intention paper contains
proposals in each of these areas, moving forward with implementing policy and programs in
all three will be critical to B.C.’s success in achieving its ZEV goals.
In particular, Tesla strongly supports the government’s proposals to:
1. Establish a ZEV mandate to increase vehicle availability and consumer choice in B.C.,
that goes into effect by 2020 (see 3B);
2. Review the consumer purchase incentive program and set appropriate thresholds and
timelines to phase-out those incentives (see 3A); and
3. Develop a sustainable freight strategy with a focus on the role of heavy-duty electric
trucking (see 3D).
Furthermore, Tesla encourages the government to provide a positive regulatory environment
for private investment in electric vehicle charging stations by site hosts, charging networks
and automakers alike (see 3Aiii).
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2. BACKGROUND
2-A. ABOUT TESLA IN CANADA & BRITISH COLUMBIA
Tesla’s mission is to accelerate the world’s transition to sustainable energy.
Polluting vehicles are significant contributors to poor air quality and cause climate change.
The transition to clean, zero emission transportation, is urgently needed to protect human
and environmental health. To this end, Tesla designs, develops, manufactures and sells high-
performance fully electric vehicles and solar energy generation and energy storage products.
Tesla currently employs several hundred Canadians in roles that include sales, service,
charging infrastructure deployment, real estate, engineering, and administration.
Approximately one-quarter of Tesla’s rapidly growing Canadian workforce is based in British
Columbia.
To date, Tesla vehicles in the province have driven more than 100-million all-electric
kilometers.1 According to IHS Market Insight, approximately 3,500 Tesla vehicles are
registered in the province of British Columbia (as of the end of June 2018).2
To support its current and future customers, Tesla has already invested millions-of-dollars in
charging infrastructure across the province. To date, the company has built 86 Supercharging
connectors at 12 locations and has deployed more than 310 Level-2 charging connectors in
B.C.3 Additional charging sites are due to open in 2018, including in downtown Victoria and
the Greater Vancouver Area. Unless impeded by the British Columbia Utilities Commission
(BCUC) which is considering imposing new burdensome and duplicative regulation on
charging providers, Tesla intends to expand the Supercharger network to include a new
corridor along Highway 3 through southern British Columbia to complement the existing
Supercharger corridor that already links Tsawwassen to Vancouver and Calgary. Tesla
Superchargers also provide British Columbians with seamless charging service across the
Canada-US border and will soon enable travel across the trans-Canada highway between
Victoria and Halifax. Figure 1 presents a map of Tesla charging stations in Western Canada.
1 For GHG reduction benefits by city in Canada visit Tesla’s “Carbon Impact” website at: https://www.tesla.com/en_CA/carbonimpact
2 IHS Market Insight, years 2011-2018 YTD (ending 2018/06).
3 Tesla Superchargers are the fastest installed charging solution available in Canada and provide up to 270 kilometers of range in a 30 minute
charge.
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CanadaFIGURE 1: TESLA CHARGING STATIONS IN BRITISH COLUMBIA, BUILT AND PLANNED.
RED – SUPERCHARGER LOCATION (MULTIPLE CONNECTORS); GRAY – SUPERCHARGER LOCATION (PLANNED); BLACK – LEVEL 2 DESTINATION CHARGING
2-B. HEALTH IMPACTS AND ECONOMIC COSTS OF AIR POLLUTION
Air pollution from tailpipe emissions leads to higher instances of cancer, cardiovascular and
respiratory diseases, childhood asthma, and numerous other health issues. In Canada, air
pollution has been shown to have a significant impact on public health. Studies have cited
annual air pollution-related premature deaths at 7,7004 and as high 21,000.5 These ailments
not only reduce the quality of life for residents in affected areas, they also lead to substantial
increases in health care expenditures and reduced workforce productivity. Lost productivity,
health care costs, and other economic impacts resulting from local air pollutants are reported
to cost Canadians $36-billion annually.6 If left unchecked, global air pollutants (greenhouse
gasses) are projected to cost Canadians as much as an additional $43-billion annually by
2050.7 In the US, the Environmental Protection Agency (USEPA) recently assessed the impact
of its Clean Air Act Amendments and found that the economic benefits of the regulations will
4 International Institute for Sustainable Development, 2017, “Air Pollution Causes Premature Deaths in Canada”,
https://www.iisd.org/sites/default/files/publications/costs-of-pollution-in-canada-highlights-en.pdf
5 Michael Brauer, et al, 2013, Traffic-related air-pollution in Canada: http://www.cmaj.ca/content/185/18/1557
6 International Institute for Sustainable Development, 2017, “Air Pollution Causes Premature Deaths in Canada”,
https://www.iisd.org/sites/default/files/publications/costs-of-pollution-in-canada-highlights-en.pdf
7 See Pan Canadian Framework on Clean Growth and Climate Change
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Canadasurpass the costs by at least thirty to one.8 The hidden costs of a transportation fleet fueled
by petroleum combustion to the province are significant and should be weighed against any
costs associated with transitioning to ZEV technology.
In addition to reducing costs and improving public health, the transition to ZEV
transportation will also create new jobs in the electrical and construction trades as new,
green, infrastructure is built. Using British Columbia’s abundant local and clean electricity not
only further reduces emissions but also keeps “fueling” dollars used to charge electric cars in
the provincial economy instead of exporting economic benefits to import costly petroleum
products and environmental costs.9 ZEVs mean more jobs in electricity generation,
transmission, distribution, and charging infrastructure development within the province.
In short, investing in ZEVs and establishing supportive policies provides a significant return
on investment to all British Columbians. Policies and investments supporting ZEVs will save
households, the government and all taxpayers money. They will also create jobs, improve
public health and reduce premature deaths while meaningfully contributing to the fight
against climate change.
3. RESPONSE TO “PROPOSALS FOR CLEAN TRANSPORTATION”
3-A. INCREASE INVESTMENT IN ZERO EMISSION VEHICLES
In this section “ZEV” refers to those vehicles with no tailpipe emissions. Where reference is
made to transitional vehicles, such as Plug-in Hybrids Electric Vehicles (PHEVs), they are
explicitly referenced.
8 US EPA, 2011, “https://www.epa.gov/clean-air-act-overview/benefits-and-costs-clean-air-act-1990-2020-second-prospective-study “ at:
https://www.epa.gov/clean-air-act-overview/benefits-and-costs-clean-air-act-1990-2020-second-prospective-study
9 Statistics Canada has reported that Canadians burn over 40-billion litres of fossil fuel every year in their cars and light trucks.
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Canada3-A-I. CONTINUATION OF EXISTING PURCHASE I NCENTIVES
Government Proposal:
Under this proposal, incentives could continue under the CEV Program until ZEVs [including
transitional ZEVs such as PHEVs] make up 5% of all new light-duty vehicle sales. Light duty
vehicles include SUVs, light trucks and passenger vehicles under 4500 kg. Once the 5%
target is reached, incentives would be phased out. The price gap between ZEVs and
gasoline vehicles is anticipated to close in the mid-2020s.
Tesla supports the government’s proposal to maintain and extend purchase incentives for
clean vehicles in British Columbia; however, key changes to the government’s proposal will
better accomplish the its goal of maximizing environmental benefits and would make the
program more financially sustainable. Tesla is also supportive of the government’s proposal
to phase-out incentives over time, as the rapid elimination of incentives shocks markets and
stunts near-term electric vehicle adoption.
Recommendations:
• Ensure that the proposed 5% light-duty electric vehicle sales milestone is applied on
an economy-wide basis – it should not be tied to individual manufacturers. Phasing
out purchase incentives on a brand-by-brand basis penalizes innovators and rewards
laggards.
• Change the proposal to phase out incentives at a minimum of 7% sales rather than 5%.
Sales data from IHS Market Insight (presented in Figure 2 below) suggests that annual
B.C. ZEV and plugin hybrid sales could reach 5% of all passenger vehicle sales by as
early as next year, triggering a phase-out sooner than the government may be
intending. Plug-in vehicle sales represented 3.4% of all vehicles sold in the first six
months of 2018.10
10 IHS Market Insight, 2018 YTD Data ending 06/2018.
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CanadaFIGURE 2: ZEV + PHEV MARKET TRENDS, BRITISH COLUMBIA
SHOWING EXPONENTIAL TREND CURVE TO 2020
• Phase out incentives over three years once the sales milestone is achieved.
Accelerated phase-outs and program cancellations immediately and negatively impact
sales. When the milestone is reached, the goal should be to phase out incentives such
that total, province-wide, electric vehicle sales continue to increase each quarter.
Removing incentives too quickly will lead to significant reductions in sales, missed ZEV
adoption targets, redirected ZEV supply and even reduced capital investment and
jobs. These outcomes would likely inhibit growth and innovation from ZEV
manufacturers and their suppliers and would result in higher regulatory compliance
costs for internal combustion automakers.
• Top-up the existing CEVforBC incentive program if it is at risk of being depleted
before the government’s new incentive policies (and potential new funding) come into
effect. A gap in funding would likely cause a significant decline in electric vehicle sales
at a critical juncture of ZEV deployment and a “gap” may lead to confusion among
customers and dealers/retailers.
• Program incentives should be rewarded on the basis of environmental benefit,
measured through electric vehicle range, not antiquated battery sizes. The US
Department of Energy released data in December 2017 showing that the median
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Canadaelectric car range has increased by 56% since 2011, from 117km to 183km as battery
prices decline and vehicle technologies improve.11 British Columbia should incentivize
vehicles on the basis of real-world electric-only range (including for PHEVs) and not
battery size. This approach will have the additional benefit of being more easily
understood by the public as compared to using a measure (kWh) that many British
Columbians will not be as familiar with.
• To ensure the incentive program’s financial sustainability, consider alternatives to tax-
base funding by operating a revenue neutral, regulatory-fee based, “polluter-pay”
feebate program. Feebate programs levy fees against only the most expensive and
polluting vehicles and use those funds to provide incentives to encourage the
purchase of the cleanest vehicles. France has successfully implemented a feebate
program to incentivize the purchase of electric vehicles since its feebate program was
redesigned in 2012 to be self-financed by new-car buyers.12 Consumers can avoid
regulatory fees by buying a less polluting vehicle, making the French program a true
“polluter-pay” model. The French program has operated alongside the European price
on carbon; a similar program in B.C. would be entirely complementary to the
province’s existing carbon tax on polluting fuels.
• Consider supporting low-and-modest income households with an additional grant for
ZEV purchases, including for used electric vehicles. Provide an additional electric
vehicle purchase incentive for households with low-and-modest incomes, which would
complement the environmental, behaviour change, and innovation goals of the
principal purchase incentive program referenced above. The parallel low-and-modest-
income program could also be funded through the revenue-neutral feebate program
as described above.
11 For more information see: https://electrek.co/2017/12/26/average-electric-car-range/
12 In 2016 for example, only 250,000 vehicle buyers out of a total of 2.4-million, faced any fee as a result of the bonus-malus program when
buying the most polluting vehicles. These fees paid for ZEV incentives in France. Because consumers can avoid the costs associated with a
feebate program (by buying a less polluting vehicle) consumers have the option to avoid the fee altogether. According to the French Court of
Auditors in its 2016 official report, the running costs of the feebate program represented only € 860-thousand on a program budget of
€ 265-million in revenue and € 235-million in expenses.
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Canada• Revise program administration so that consumers may apply directly for incentives.
Provide customers and vehicle dealers/retailers more choice by permitting customers
to directly apply for the incentive. All other provinces in Canada that have offered
incentives have provided a consumer-facing application. Requiring dealers/retailers to
reduce prices and reclaim incentives later can increase risk and business uncertainty.
Moreover, it can require those dealers/retailers to cover an exceptionally large balance
of vehicle incentives, causing unnecessary financial strain. For example, a smaller
retailer that has sold 20 vehicles, each eligible for $5,000 in incentives, is effectively
financing $100,000 at its direct expense until reimbursed by the incentive program.
Furthermore, it is often the case that the retailer bears repayment risk should a
consumer not follow all program rules. Dealers/retailers who sell more than 200
electric vehicles in a year will potentially be carrying financial burden and direct risks
in the millions of dollars. While this would not be the case for Tesla, for many
dealers/retailers these risks and their associated administrative burden will
increasingly discourage them from marketing ZEVs, consequently pushing consumers
towards internal combustion engine vehicles instead. The government will benefit
from having broader support for a ZEV mandate and might consider whether the
potential for dealers to carry additional costs and risks each year would diminish the
support of this constituency.
3-A-II. NON-FINANCIAL INCENTIVES
Government Proposal:
Zero emission vehicles already have access to high occupancy vehicle lanes regardless of
the number of passengers in the car. Additional non-financial incentives, such as preferential
parking and access, could be considered.
Tesla is supportive of the government’s proposal to continue offering high occupancy vehicle
lane access (among other non-financial incentives) to electric vehicle drivers as it has been
demonstrated that HOV lane access leads to greater electric vehicle adoption rates. The
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CanadaLuskin Centre for Innovation published a 2016 study stating that: “roughly one quarter of
California PEV registrations during 2010-2013 were a result of the HOV lane policy.”13
The heavy use of ferries in British Columbia, both coastal and in-land, offers British Columbia
with unique opportunities to provide new non-financial incentives. Norway has used ferry-
related policies to support electric vehicle adoption since 2009 when it introduced free tolls
for electric vehicle drivers. In 2018 this benefit was reduced to a 50% price reduction in light
of achieving an electric vehicle adoption rate in excess of 20% of new vehicles sold.
Additional suggestions for consideration:
• The government of British Columbia could consider how the BC Ferries and the
Ministry of Transportation ferry fleets could be used to support electric vehicle
adoption. Non-financial incentives could include a priority boarding lane and the
establishment of “charging hubs” where private sector charging operators of various
brands could directly invest and operate pay-for-use stations at ferry terminals,
without exclusivity.
3-A-III. CHARGING I NFRASTRUCTURE
Government Proposal:
1. The province could continue to support our growing charging and refueling infrastructure
allowing zero emission vehicles to travel throughout British Columbia safely and
conveniently.
2. The province could take measures to encourage charging station installations at
businesses and other buildings, helping to expand our clean vehicle infrastructure.
Tesla is generally supportive of the government’s proposals to increase the availability of
charging infrastructure in British Columbia although realignment of infrastructure priorities is
advised and is discussed further below:
13 Tamara L. Sheldon and J.R. DeShazo, 2016, “How does the presence of HOV lanes affect plug-in electric vehicle adoption in California?” see:
http://innovation.luskin.ucla.edu/sites/default/files/2016.02.23_GPSHOV.pdf.
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CanadaR EGARDING “C HARGING STATION INSTALLATIONS AT BUSINESSES AND OTHER BUILDINGS ”
One of the most significant barriers to electric vehicle adoption in cities is the inability
for city dwellers to charge their electric vehicle at home. For example, a resident who
lives in a multi-unit residential condominium/strata or rental and who does not have
access to charging stations (or electrical capacity within the building for charging
stations) will not likely purchase an electric vehicle. Given that more than 80% of
charging typically happens at home, access to a home charger is paramount.
In 2018, Ontario introduced new rules under the Condominium Act in that province,
making it easier for condominium (strata) residents to install charging. For example,
the new rules require condominium corporations to approve requests to install
charging made by residents except under limited prescribed conditions.14 Ontario also
amended its building code to require new commercial buildings be equipped with
electric vehicle charging stations in 20% of new structured or underground parking
stalls.15
While some British Columbia municipalities are using zoning and parking standards to
require 100% ‘electric vehicle-readiness,’ in new buildings, the costs associated with
retrofitting existing buildings to provide reasonable power to support even one-third
of the parking stalls is a significant barrier.
Recommendations:
• Existing buildings: Develop programs to provide financial support to strata
councils and residential apartment building owners to make electrical retrofits for
electric vehicle charging both possible and practicable.
• New buildings: Establish minimum requirements in the building code for home,
multi-unit and workplace charging. Municipalities should be permitted to exceed
these rules through local building standards and/or zoning and parking standards.
14 The 2018 Ontario Condominium regulatory changes are available for reference at: https://www.ontario.ca/laws/regulation/r18114
15 See Travis Allan, 2017, “Ontario releases building code changes” at http://www.demarcoallan.com/single-post/2017/05/26/Ontario-Releases-
Building-Code-Changes-Targeted-at-Making-it-Easier-to-Charge-in-Many-New-Residential-and-Workplace-Buildings
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CanadaGiven plans to establish a ZEV mandate in B.C., and the extreme cost of post-
construction electrical retrofits, it is also appropriate to equip all new houses with
sufficient electrical capacity and conduit between the electrical panel and garage
at time of construction. Furthermore, it is appropriate that all new multi-unit
residential buildings be equipped with sufficient electrical capacity on-site to
deliver a rated 40 amperes to at least 33% of parking stalls.
“T RAVEL THROUGHOUT B RITISH C OLUMBIA SAFELY AND CONVENIENTLY ”
Tesla supports the government’s efforts to increase electric vehicle charging
availability, particularly in less competitive corridors in remote and northern parts of
the province. Tesla urges the government to avoid entering into exclusive agreements
with any one charging provider for projects that it directly undertakes.
Recommendation:
• Consider setting aside lands for “charging hubs” on long-distance travel
corridors. These sites could host charging services from different brands.
Additionally, private investment in power upgrades and infrastructure may help
reduce costs that would otherwise be borne entirely by the taxpayer or
ratepayer.
D ON ’ T D EEM P RIVATE C HARGING O PERATORS TO BE P UBLIC U TILITIES
The Province of British Columbia, through its agency -- British Columbia Utility
Commission (BCUC) -- has proposed an electric vehicle charging station policy that
would severely discourage private investment in electric vehicle charging
infrastructure. This at a time when electric vehicle charging investment is most needed
to promote more electric vehicle adoption. Should the BCUC deem privately built,
funded and operated electric vehicle charging stations to be “public utilities,” it would
make B.C. the only jurisdiction in the world where Tesla operates to have done so. The
result would undoubtedly impede private-sector charging investments by Tesla and
others.
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CanadaRecommendations:
• Confirm that the definition of “public utility” under the Utilities Commission Act
(“UCA”) does not include electric vehicle charging. Functionally, an electric
vehicle stores a chemical battery charge for the sake of mobility and
transportation, not for “producing light, heat, cold or power” (per the definition
in the Utilities Commission Act). These terms would ordinarily be used to refer
to providing electricity delivered to a home, industrial facility, or other building.
A well-reasoned, plain meaning reading of the UCA’s definitions of “public utility”
and “compensation” would not result in electric vehicle charging services being
classified as services of a public utility in exchange for compensation.
• In the alternative, Tesla recommends that the government move to add an
additional exemption to the definitions section of “public utility” under the
Utilities Commission Act at the earliest opportunity, stating: “a person not
otherwise a public utility engaged in the ownership, installation, or operation of
electric vehicle equipment or electric vehicle charging.”
For more information please consult exhibits A-35 and C28-6 of BCUC project number
1598941, An Inquiry into the Regulation of Electric Vehicle Charging Service.16
Continues on next page.
16 See the BCUC website at the following link for exhibits: http://www.bcuc.com/ApplicationView.aspx?ApplicationId=613
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Canada3-B. ZERO EMISSION VEHICLE MANDATE
Government Proposal:
British Columbia’s CEV Program is helping to increase demand for zero emission vehicles.
Under the proposed ZEV mandate – similar to Quebec’s and 30% of the US vehicle market –
British Columbia would require that automakers supply zero emission vehicles for the light-
duty vehicle market. This would help meet increasing demand while providing more choices
for clean transportation.
Starting in 2019, British Columbia’s proposed supply requirement for ZEVs would require
automakers to report on their sales. Then in 2020, automakers would have to meet targets
for new vehicle sales. These could increase annually, reaching at least 10% in 2025 and 30%
in 2030, as ZEVs become increasingly common and affordable, and convenient charging
options become more available.
Tesla strongly supports the British Columbia government’s proposal to establish a ZEV
mandate with compliance beginning in 2020 and with data collection commencing in 2019.
This timeline is not overly ambitious, is achievable and provides ample time to develop rules
for its implementation.
In order to accelerate the deployment of electric vehicles, ZEV mandates have been adopted
in jurisdictions around the world, including California, nine other U.S. states, China, and
Quebec. A robust ZEV standard in B.C. would ensure that all automakers, including Tesla,
develop and deliver clean vehicles for the province to facilitate the transition to sustainable
transportation. The creation of a program anchored on near-and medium-term ZEV adoption
goals would not only reap significant environmental and economic benefits for British
Columbians but also enable the province to achieve its broader climate change objectives.
Likewise, when adopting a mandate, B.C. cannot afford to set less stringent standards than
other nearby mandates as doing so would limit the mandate’s effectiveness.
3-B-I. BENEFITS OF A ZEV MANDATE
A British Columbia ZEV mandate would create new jobs in the electrical and building trades
as the new zero emission fueling infrastructure of the future is deployed, operated, and
maintained. Excluding residential charging equipment, Natural Resources Canada reports that
there are currently 1,358 electric charging stations in the province, of which 146 are Direct
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CanadaCurrent Fast Chargers (DCFCs) and 1,212 are Level II (240v) chargers.17 Assuming each DCFC
costs $60,000 and each Level II connector costs $2,00018, this infrastructure already
represents $9 million in investment – most of which has been provided by the private sector.
Because a ZEV mandate guarantees that a certain number of ZEVs are to be delivered in the
province (relative to sales), a mandate will catalyze additional economic impact through
further private investment and job creation in the electrical and construction industries. More
electric vehicles on B.C. roads equate to more jobs in electricity generation, transmission and
distribution and infrastructure development, deployment and maintenance.
A ZEV mandate will put British Columbia’s zero emission electricity surplus to use, tackling
transportation emissions while generating better value for ratepayers. Whereas gasoline and
diesel vehicles require imported fuel, ZEVs run on locally-generated, transmitted and
delivered electricity. This keeps valuable fueling dollars within the province and grows the
local economy. Last year, British Columbia exported almost 14-million MWhs of electricity to
the USA at an average price of just $0.044 / kWh).19 With Site C coming online in the future,
the province is well suited to accelerate electric vehicle adoption while using this excess
supply of clean electricity to reduce fueling costs for drivers and to generate better value for
British Columbians from local generation assets. A growing fleet of ZEVs would benefit British
Columbia by helping to capture this presently unrealized value.
By ensuring that ZEV supply is available in British Columbia, more consumers will transition
from internal combustion engines to ZEVs, saving money through reduced fueling costs.
According to the Union of Concerned Scientists, ZEV owners save between $750 and $1,200
($USD) per year on avoided gas costs when they switch from ICEs, depending on battery size
and efficiency.20 Most consumers drive 20,000+ kilometers annually, and the USEPA
considers 314,246 kilometers a vehicle’s useful life. At this rate, these sources suggest that
ZEV owners can save between $11,265 and $18,024 ($USD) over the lifetime of the vehicle.
17 See Natural Resources Canada database at:
http://www.nrcan.gc.ca/energy/transportation/personal/20487#/analyze?country=CA&fuel=ELEC. Note that this database is known to
under-report existing charging station investments made by Tesla in Canada. As such the figures reported are likely low.
18 These are conservative estimates and include both equipment and installation. Without economies of scale costs are likely higher than listed.
19 Imports & Exports of Energy Products to and from Canada, Canada National Energy Board, Modified at:
https://apps2.neb-one.gc.ca/imports-exports/
20 Union of Concerned Scientists, October 2013, Infographic: “Electric Vehicles — Oil Savings in Action” at:
https://www.ucsusa.org/clean_vehicles/smart-transportation-solutions/advanced-vehicle-technologies/electric-cars/electric-vehicle-
infographic.html#.W317JJNKh24
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CanadaReductions in fuel consumption result in vital environmental and public health benefits. ZEVs
charged from even a dirty electricity grid result in fewer greenhouse gas emissions relative to
the average gasoline-powered vehicle. In regions with the clean electricity grids like B.C.,
battery electric vehicles in particular provide better environmental and public health benefits
than any other passenger vehicle fuel option.
B.C. has set ambitious targets to reduce GHG emissions by 80% below 2007 levels by 2050.
Achieving these targets is critical as the impacts of climate change are becoming increasingly
pronounced with each passing year. Ocean acidification has surged by 30% since the
beginning of the Industrial Revolution, extreme weather events are escalating in number and
severity, and average global temperatures are rising each year.21 The transportation sector is
the largest source of GHG emissions in British Columbia, accounting for roughly 25%.22
Therefore, transitioning the transportation sector to zero emission technology is one of the
most impactful steps B.C. can take to advance its emissions reduction goals. Supply policies
and ZEV mandates can play a crucial role in this regard.
In the absence of a ZEV mandate, British Columbians could lose the opportunity to create
jobs, retain local resources, save on fuel, and improve the environment. According
Vancouver’s 2018 Staff Report, “The City fleet, which continues to lead Canadian
municipalities on ZEV adoption, is experiencing the impacts of newly introduced ZEV
mandates elsewhere as manufacturers divert supply to jurisdictions with ZEV mandates, such
as Quebec, California, Oregon, and eight other US states. This is further reducing the already
limited availability of ZEV models locally.”
ZEV mandates work: automakers respond to mandates and allocate limited ZEV inventory
accordingly. Ford Canada lists the Ford Focus Electric as only being available only in Quebec,
and GM has publicly stated its intent to direct the bulk of its electric vehicle supply to China,
where the mandate requires automakers to achieve 10% ZEV sales in 2019.23 The Canadian
21 NASA Climate, as of August 22 2018, “Climate Changed: How Do We Know?” at: http://climate.nasa.gov/evidence/
22 Environmental Reporting BC, August 2016, “Trends in Greenhouse Gas Emissions in B.C. (1990-2014)” at:
http://www.env.gov.bc.ca/soe/indicators/sustainability/ghg-emissions.html
23 Paul Leinert and Nick Carey / Reuters Business News, January 17 2018, “Big portion of future GM electric vehicles for China market:
executive” at:
https://www.reuters.com/article/us-autoshow-detroit-gm-china/big-portion-of-future-gm-electric-vehicles-for-china-market-executive-
idUSKBN1F702M
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CanadaPress reported in August 2018 that a “limited selection” of electric vehicles and “supply
issues” remain among the most significant barriers to electric vehicle adoption in Canada.24
Another example of ZEV mandates impacting supply was the recent announcement by
Toyota that it would be bringing the Mirai ZEV to Canada in response to the Quebec
mandate.25
3-B-II. ADDRESSING MYTHS AND M ISINFORMATION A BOUT ZEV MANDATES
Opponents of a ZEV Mandate may counter that compliance is burdensome or unachievable
because consumer demand is limited. They may identify metrics suggesting that electric
vehicles still only represent a fraction of overall vehicle sales. However, arguments around
diminished consumer demand could not be further from the truth. Consumer demand for
electric vehicles in Canada is growing rapidly, with the market expanding by 68% between
2016 and 2017.26 But without mechanisms to ensure automakers deliver limited supply to
British Columbia, demand may go unfulfilled while compliance obligations are first met in
other jurisdictions.
A lack of available inventory – not consumer demand – has been the primary determinant of
slow ZEV adoption in most jurisdictions. Jurisdictions that have not yet implemented ZEV
mandates are known to receive fewer ZEVs from automakers than those jurisdictions with
mandates. In California, dealers in the five largest cities offered one fully electric sedan for
every twenty gasoline sedans on their lots. Non-ZEV states’ inventories are even more limited.
In Colorado, a non-ZEV state in the US with some of the most generous consumer incentives,
the ratio in the five largest cities is just one to forty two.27 Furthermore, few electric vehicle
models are offered outside of ZEV states. California has twenty-nine different plug-in models
on its roads, while the average non-ZEV state has only nine. ZEV mandates encourage
electric vehicle deployment by providing consumers with significantly greater choice. As
24 Canadian Press/National Post, August 20 2018, “Electric Vehicle Sales Growing, But Supply, Lack of Knowledge Remain Barriers.”
https://nationalpost.com/pmn/news-pmn/canada-news-pmn/electric-vehicle-sales-growing-but-supply-lack-of-knowledge-remain-barriers
25 Canadian Press/Driving, January 3 2018, “Toyota bringing hydrogen fuel cell cars to Quebec About 50 Mirai fuel cell electric” at:
https://driving.ca/auto-news/news/toyota-bringing-hydrogen-fuel-cell-cars-to-quebec
26 Policy Options, 2018, “Electric Vehicles as Part of Canada’s Climate Change Solution” at:
http://policyoptions.irpp.org/magazines/july-2018/electric-vehicles-as-part-of-canadas-climate-change-solution/
27 Dealer inventory search from city center zip codes with 10-mile radius on autotrader.com in June 2018. Five CA cities: Los Angeles, San
Francisco, San Jose, San Diego, Fresno. Five CO cities: Denver, Colorado Springs, Fort Collins, Aurora, Lakewood
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Canadanoted above, when Quebec introduced a mandate, new ZEV models were introduced in that
province for the first time in Canada.
In addition, dealers may argue that jobs in sales and service would be at risk from a ZEV
mandate that requires the sale of new technology to displace polluting legacy technology.
This outcome would almost certainly not be realized. California first began enforcing the ZEV
mandate in 2012. Despite this, US government data shows that there has been strong and
sustained job growth in the US automotive motor vehicle and parts retail sector in the state
since that time (NAICS 441, see Figure 3). Tesla is not aware of any data to suggest that jobs
have been lost as a result of implementing ZEV mandate programs. With the population of
British Columbia expected to increase by more than 800,000 people between 2017 and
2030, and with vehicle ownership per household on the rise, automotive dealers
knowledgeable about ZEVs are likely to receive more demand than ever.
FIGURE 3: AUTOMOTIVE DEALER JOBS (VEHICLES & PARTS)
SOURCE: US GOVERNMENT BUREAU OF LABOR STATISTICS
Dealers in other jurisdictions have argued that there is a burden on them as a result of a ZEV
mandate. Nothing could be further from the truth. ZEV mandates impose no compliance
obligations on dealers whatsoever. The compliance obligation is placed upstream on
automakers.
There is no causal relationship between ZEV mandates and increased vehicle prices. The
traditional automotive industry has raised concerns with the USEPA about increased
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Canadaenvironmental regulation and its impact on affordability on automobiles, particularly lower
priced internal combustion vehicles28. Automakers stated that increased fuel economy
standards would drive up vehicle costs significantly and would eliminate the availability of
low-cost vehicles (vehicles priced below $15,000 USD). After significant investigation by the
agency, USEPA determined that these industry claims were overstated and that the same
number of offerings in the price range exist today despite the concerns raised by some
automakers during program design.29 Likewise, there is no evidence to suggest that ZEV
mandates have had a causal impact leading to price increases in the internal combustion fleet
in any ZEV jurisdiction.
3-B-III. A ZEV MANDATE IS FEASIBLE IN BRITISH COLUMBIA
While the technical details of a potential British Columbia ZEV mandate are yet to be
designed, preliminary modeling conducted by Tesla, based on the application of Quebec’s
rules to the British Columbia market, suggests that automakers would easily be able to
achieve the same targets as set in Quebec. Today, ZEVs represent just under 2% of vehicle
sales in the province (and 3.4% year to date as of June 30, 2018). Assuming that British
Columbia implements identical, annual targets and similar program rules as Quebec with
2020 as the first year of enforcement, automakers would be able to achieve the standards
through 2025 with only 8% ZEV sales – 2% below the stated target in the Intentions Paper.
With supportive demand-side policies to accompany a mandate, it should be straightforward
for automakers to comply with a ZEV mandate, based on known growth in demand, provided
that vehicle supply is delivered to the province.
3-B-IV. RECOMMENDATIONS FOR THE IMPLEMENTATION OF A ZEV MANDATE IN BC
Recommendations:
• Within the ZEV mandate framework, British Columbia should adopt the same
definition for “Zero Emission Vehicle” as used in other mandate jurisdictions in North
America to avoid unintended consequences and confusion. In programs across the US
and in Quebec, a “ZEV” is defined as a vehicle with zero tailpipe emissions. In these
28 Raised in conjunction with Model Year 2017-25 Light Duty GHG rule setting several years ago
29 See US-EPA, 2016, Draft Technical Assessment Report at: https://nepis.epa.gov/Exe/ZyPDF.cgi/P100OXEO.PDF?Dockey=P100OXEO.PDF
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Canadaother programs, a plugin-hybrid is a “transitional ZEVs” (or tZEV). Using a different
definition from other jurisdictions may lead to confusion in the industry and result in
unintended policy outcomes. Tesla strongly encourages alignment with other ZEV
programs on the definitional aspects of any future BC program.
• To expedite implementation, B.C. should adopt the Quebec ZEV mandate program
with three minor adjustments to reflect local market conditions and to ensure B.C.-
specific targets are achieved:
o Compliance obligations are typically based on automaker size. Tesla
recommends using California’s automaker size classifications, adjusted
proportionally to match B.C.’s market size, which is 12% the size of California’s.
Proportionally adjusted thresholds would be:
§ 1,200 BC sales/year = intermediate volume manufacturer; and,
§ 7,000 BC sales/year = large volume manufacturer.
o Avoid providing alternative compliance pathways that ultimately enable
manufacturers to comply without achieving actual sales targets set by the
province. Examples of these problematic pathways include:
§ Providing bonus credits for historic ZEV deliveries made before the
mandate’s commencement date.
§ Providing credits for low-speed vehicles that do not meaningfully
replace demand for on-road passenger vehicles.
o If B.C. decides to permit crediting for used ZEVs (imported into the province)
then B.C. should not apply arbitrary odometer thresholds as they benefit the
earliest technology and shortest range ZEVs and will do little to spur on a
second hand market for used EVs. Given that ZEVs require less range-related
maintenance than ICE vehicles such thresholds are not necessary or
appropriate.
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Canada3-B-V. INTERNAL C OMBUSTION V EHICLE SALES BY 2040.
Government Proposal:
By 2040, British Columbia could ban the sale of new gasoline and diesel light duty vehicles.
Tesla is supportive of achieving a fully sustainable transportation system. This goal would be
supported by British Columbia’s proposal to set a target date to end all sales of internal
combustion vehicles. Establishing a date to end the sale of internal combustion vehicles will
send an important market signal and establish a clear and direct policy framework, with
predictability, within which all automakers can plan their businesses. Furthermore,
establishing such targets is critical in encouraging additional global action in the fight against
climate change. Such targets are especially important in light of steps being taken in the US
to stall progress on vehicle greenhouse gas emission standards (and potentially in Canada, as
a result of the adoption of US standards by reference).
In an effort to address local and global air pollutants, several governments around the world
have already taken steps to establish target dates to end the sale of internal combustion.
These countries include:
• Norway, which intends to ban internal combustion sales by 2025;
• Germany, the Netherlands, and India intend to ban internal combustion vehicles by
2030;
• The United Kingdom plans to ban internal combustion vehicles by 2040 and Scotland
plans to do so by 2032;
• France has indicated that it intends to end the sale of gas and diesel powered vehicles
by 2040; and
• China is actively considering a ban and recently established a cap-and-trade like
system on internal combustion vehicles.
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Canada3-C. CLEAN FUEL STANDARD
Government Proposal:
Under current regulations, by 2020, fuel suppliers must decrease the average carbon
intensity of their fuels by 10%, compared to 2010 levels. As part of our clean growth
strategy, the province is proposing to increase that requirement to 15% by 2030. The
government could consider raising it further to 20% when they review the standard again in
2020.
Tesla is supportive of the increased stringency proposed for the British Columbia Clean Fuel
Standard (BC-CFS) program but is concerned that the BC-CFS has failed to properly account
for clean fuel use in the electric-mobility sector. In order to ensure the success of the BC-CFS
program, the clean fuel used in electric vehicles must be comprehensively and accurately
captured to generate credits. There is precedent to demonstrate how the current framework,
which primarily permits utilities to generate these credits, results in minimal credits being
generated. This structure will cause the program to miss an opportunity to achieve a higher
level of stringency sooner. Modifying the regulation to enable parties with accurate and
comprehensive charging data to generate credits would further the goals of the BC-CFS and
accelerate the transition to clean transportation.
Tesla believes that an effective credit-based clean fuel program subscribes to the following
principles:
Principles Benefits
• Capture 100% of electric vehicle Charging: Enables government to report on success;
count all sessions, whether at home or in ensures modelling expectations are
public, towards BC-CFS program objectives accurately reflected in the marketplace;
to maximize benefits for consumers and the supports increasing stringency.
environment.
• Only use highest quality data and avoid the Increase program integrity and confidence
use of estimates: data should be accurate and among regulated entities and the public.
verifiable to prevent double counting and to
ensure pathway integrity.
• Require reinvestment of monetized electricity Increase private sector investment and
credits in the electric vehicle sector: funds create demand-side incentives for electric
generated by companies through the electric vehicle adoption.
vehicle pathway should be reinvested to
reduce electric vehicle costs, increase access
to charging or increase consumer awareness
of the technology.
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Canada• Simplify administration: implementation Support program sustainability by
should minimize administrative burden; consolidating data providers (e.g. using
minimize layers of regulatory approvals aggregated data from automakers), and
required (e.g. provincial regulators). avoiding the use of charging estimates.
Any approach that fails to count 100% of electric vehicle charging sessions, without the use
of estimates, is insufficient and will lead to long-term systemic problems within the BC-CFS
program design. By working with automakers and charging operators directly, the British
Columbia government could ensure that all clean fuel use is being counted with limited
administrative burden and the most robust data (e.g. aggregated telematics data). This
change can create new revenue streams for investments including electric vehicle rebates,
charging infrastructure and consumer education.
Recommendation:
• Enable electric vehicle manufacturers and charging station operators to
participate in the BC-CFS program and generate credits using the highest quality
data to ensure that all clean fuel used by electric vehicles in B.C. is counted.
3-D. CLEANER TRANSPORTATION SYSTEMS (HEAVY TRUCKS &
SUSTAINABLE FREIGHT)
Government Proposals:
Increased use of clean electricity and technologies in our ports; Working with stakeholders
to make trade and shipping cleaner and more efficient in B.C.; Working with utilities to
increase incentives to stimulate investments for zero emission heavy duty vehicles as well as
infrastructure for lower carbon fuels, such as electricity…
Tesla is supportive of actions that encourage the adoption of more sustainable transportation
modes, including electric freight trucks and other technologies to reduce emissions
associated with the movement of freight. Freight trucks are responsible for the largest
increase in Canadian transportation emissions since 1990. Freight truck emissions are
undermining provincial GHG reduction efforts and are among the most polluting vehicles on
Canadian roads.30 To this end, Tesla welcomes the opportunity to participate in the
30 Pembina Institute, 2017, “The State of Freight” at: http://www.pembina.org/reports/state-of-freight-report.pdf
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Canadadevelopment of any future proposals related to supporting heavy-duty electric trucking and
its associated infrastructure.
The Intentions Paper makes references to the California Sustainable Freight Action Plan which
sets a goal of 100,000 heavy-duty zero emission vehicles by 2030.31 It is worth noting that
California’s plan had been developed and published over a year before the first long-range
fully electric truck, the Tesla Semi, had been unveiled. The plan includes a commitment to
review the heavy-duty vehicle target in 2019, taking into account advancements in
technology.
Given the B.C. government’s additional interest in ports, it is worth noting that the ports of
Los Angeles and Long Beach have, under direction from the local municipalities in which they
reside, developed a shared Clean Air Action Plan. Of particular importance, these ports have
set a goal to prohibit any emitting trucks from entering the ports by 2035 – i.e. no emissions
whatsoever from freight trucks carrying goods to and from these ports. Achieving this goal
will ultimately be a shared responsibility of the ports, local government and the state and will
require a range of supportive policies, programs and electrical infrastructure. In addition, the
Port of Oakland is expected to establish its own clean air goals in the near future. In
comparison, Canadian ports tend only to limit the age of trucks or require certain emission
control equipment.
Recommendations:
• Work with the Federal government and B.C. port administrators to establish one
or more port-specific “Clean Air Action Plans.” Require that goals be established to
phase out access to the port by polluting trucks by a specified date. Work across
governments to develop complementary support mechanisms to enable zero
31 See Appendix B of, Government of California, 2016, “Sustainable Freight Action Plan” at:
http://dot.ca.gov/hq/tpp/offices/ogm/cs_freight_action_plan/Documents/CSFAP_AppendixB_FINAL_07272016.pdf
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Canadaemission trucking at B.C. ports, including support for electrical capacity upgrades
to facilitate heavy-duty electric truck charging.
• Establish a provincial target pertaining to on-road heavy-duty zero emission trucks
in B.C. with targets for 2025 and 2030.
• Ensure that regulations pertaining to the provision of electric vehicle charging
services in B.C. do not inhibit the deployment of privately-operated charging
stations for heavy-duty trucking. (See the aforementioned recommendation on
charging infrastructure above).
3-E. ADDITIONAL PROPOSALS FOR CONSIDERATION
Governments have the opportunity to lead by example. An effective way to do this is to
require the procurement of ZEVs at all times unless no suitable electric vehicle is available to
meet a particular need or task. The former Government of Ontario adopted such a policy
through its Climate Change Action Plan which stated that “Ontario will buy or lease green-
plate-eligible passenger vehicles for the Ontario Public Service fleet wherever possible.
Government and corporate fleets present an important opportunity to showcase the viability
and practicality of electric vehicles.”32
Recommendation:
• Adopt a government fleet procurement policy requiring the purchase of ZEVs unless a
business case is made to purchase a polluting vehicle based on particular use cases
and needs that can’t be met by an available ZEV.
• Equip all provincial government facilities with charging infrastructure, including
offices, parks, and other lands are equipped with electric vehicle charging
infrastructure.
32 Government of Ontario, 2016, “Climate Change Action Plan.” See government action 1.4 at:
https://www.ontario.ca/page/climate-change-action-plan
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Canada• Work with the Legislature and other stakeholders to establish an annual “ZEV Day” at
the legislature to help raise awareness of electric vehicles among elected officials.
4. CONCLUSION
If implemented as a whole, the proposals presented in the Government of British Columbia’s
Intentions Paper on transportation will undoubtedly be successful in getting more ZEVs onto
the province’s roads while also improving public health, creating new jobs and reducing the
economic costs to B.C. and its residents associated with the combustion of fossil fuels. In
addition, Tesla has offered a range of additional suggestions or enhancements to further
contribute to accelerating ZEV adoption in the province.
In conclusion, Tesla generally supports all of the government’s proposals to accelerate the
adoption of ZEVs in B.C. but most strongly supports the government’s proposals to:
1. Establish a ZEV mandate to increase vehicle availability and consumer choice in
B.C., that goes into effect by 2020;
2. Review the consumer purchase incentive program and set appropriate thresholds
and timelines to phase-out those incentives; and to,
3. Develop a sustainable freight strategy with a focus on the role of heavy-duty
electric trucking.
Tesla also encourages the government to ensure a positive regulatory environment exists in
B.C. to encourage private investment in charging stations by site hosts, charging networks
and automakers alike.
Ultimately, B.C.’s efforts will be most effective when a combination of demand-side policy,
supply-side policy and infrastructure policy is implemented in parallel. Tesla stands ready to
support the government in the further development of any of its policy concepts, drawing on
its extensive international experience.
Thank you for the opportunity to provide these comments.
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