This, due to sales quotas imposed on manufacturers by the Quebec government, says The Montreal Economic Institute.
The domino effect will eventually increase the marginal cost of conventional vehicles by $1,100. This means consumers will end up paying this “tax” through higher car prices.
Starting with 2018 models, carmakers will be faced with electric and hybrid vehicle sales quotas. Most car makers will have to accumulate a number of “credits” equal to 3.5% of their sales, increasing gradually to 22% in 2025.
Carmakers that fall short will have to buy the credits they’re missing, either from other carmakers that have accumulated surplus credits or directly from the government.
These quotas will, therefore, increase the marginal cost of a conventional vehicle, and so the price that consumers must pay will also increase. At 3.5%, the increase in the marginal cost will be $175 in 2018, but as the quota increases to 22% by 2025, that extra cost will also increase, to $1,100 per vehicle.