Purchasers of pre-owned zero-emission vehicles in British Columbia are eligible to receive an exemption from the seven percent provincial sales tax (PST).
Effective February 23, 2022, used electric vehicles (EVs) are exempt from PST. The ARA proposed this policy of adding a used EV incentive to help ensure the growth of the EV market and to support the industry as it transitions to the electric vehicle economy. Previous provincial government incentives focused only on new zero-emission vehicles and were limited to franchised dealerships only.
British Columbia Leads North America in EV Sales
EVs are growing in popularity among British Columbians and are predicted to make up 90 percent of all new car sales in the province by 2030. Federal legislation in Canada (as well as provincial) will require 100 percent of all new vehicle sales to be electric by 2035. These targets follow many other jurisdictions around the globe and manufactures are already in the process of remodeling their production lines to begin producing even more EV makes and models.
Roughly, 80 percent of Canadians are open to buying an EV for their next vehicle. According to a recent report from Clean Energy Canada, over 50 percent of consumers surveyed were likely to purchase an EV as their next vehicle with another 29 percent hesitant but open to the idea. Only 21 percent said they probably never would. Further, over 75 percent believe incentives are helping people be able to afford an electric vehicle and support current government incentive policies.
The Electric Transition Continues Despite Persisting Supply Chain Disruptions
Beyond incentives, however, more is required. Specifically, there is the question of supply. Supply chain disruptions have been exacerbated by COVID lockdowns, the war in Ukraine, and the current chip shortage. Just getting your hands on inventory can be problematic—both new and used. However, these will be corrected in the next two or three years as manufactures re-model their production lines to manufacturer more electric vehicles and more used inventory becomes available. Now is the time for industry and especially independent dealers to think of new ways to service and sell EVs to their customers.
Despite the ARA’s position on the matter, the government decided to make the PST exemption also applicable to private sales provided the used EV has been driven for at least 6,000 kilometres. It is important, therefore, that dealers distinguish themselves in this market by providing assurances to consumers that they are qualified professionals able to help them get into the right EV. While early adopters are coming onto the sales floor armed with research and knowledge (most often knowing more than the sales-person) this will not always be the case. All dealers in the province are licensed and regulated through the Vehicle Sales Authority of B.C. (VSA), but they can also provide a mechanical inspection (ensuring the vehicle is road safe), a warranty, a vehicle history report, and financing options, all of which provide peace of mind for consumers. Dealers can also go one step further by providing their employees with training and certification, offering the would-be EV enthusiasts peace of mind, knowing that they will receive the help they need to get into the right EV—both economical and environmental.
Industry has a role to play in helping the world transform into a more sustainable environment. For automotive service providers, including sales, towing, mechanical repair and service, collision repair, and automotive recyclers, now is the time to become EVfriendly certified.