intentions paper - current draft (aug24) · tesla currently employs several hundred canadians in...

Tesla Motors Canada ULC 1325 Lawrence Avenue East Toronto, ON M3A1C6 Canada

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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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FIGURE 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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surpass 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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3-A-I. CONTINUATION OF EXISTING PURCHASE INCENTIVES

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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FIGURE 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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electric 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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• 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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Luskin 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 INFRASTRUCTURE

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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REGARDING “CHARGING 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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Given 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.

“TRAVEL THROUGHOUT BRITISH COLUMBIA 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.

DON’T DEEM PRIVATE CHARGING OPERATORS TO BE PUBLIC UTILITIES

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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Recommendations:

• 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

16 See the BCUC website at the following link for exhibits: http://www.bcuc.com/ApplicationView.aspx?ApplicationId=613

Continues on next page.


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3-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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Current 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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Reductions 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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Press 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 MISINFORMATION ABOUT 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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noted 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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environmental 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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other 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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3-B-V. INTERNAL COMBUSTION VEHICLE 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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3-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

• Capture 100% of electric vehicle Charging: count all sessions, whether at home or in public, towards BC-CFS program objectives to maximize benefits for consumers and the environment.

Benefits

Enables government to report on success; ensures modelling expectations are accurately reflected in the marketplace; supports increasing stringency.

• Only use highest quality data and avoid the use of estimates: data should be accurate and verifiable to prevent double counting and to ensure pathway integrity.

Increase program integrity and confidence among regulated entities and the public.

• Require reinvestment of monetized electricity credits in the electric vehicle sector: funds generated by companies through the electric vehicle pathway should be reinvested to reduce electric vehicle costs, increase access to charging or increase consumer awareness of the technology.

Increase private sector investment and create demand-side incentives for electric vehicle adoption.


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• Simplify administration: implementation should minimize administrative burden; minimize layers of regulatory approvals required (e.g. provincial regulators).

Support program sustainability by consolidating data providers (e.g. using aggregated data from automakers), and 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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development 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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emission 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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• 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.