Honda Canada is not the only company unhappy about the ecoAUTO rebate program in Canada. Chrysler Canada CEO Reid Bigland wrote an Op-Ed in the National Post urging the program to be repealed. Even though Chrysler has a number of vehicles eligible for the rebates either as a result of good mileage or flex-fuel capability, Bigland still feels the program is excessively arbitrary. Picking a cutoff and saying one car gets a rebate and another doesn't simply because one is slightly above the threshold and the other below doesn't seem far when both vehicles probably offer essentially the same efficiency in the real world. A program like this should really be done with a sliding scale. The rebate should be proportional to the mileage and shouldn't should be more technology neutral. The full-text of the opinion piece is after the jump.
- Honda Canada tweaks the Fit to qualify for MPG rebate
- New Canadian ecoAUTO rebates apply to new 2006 models
As our society looks for answers on helping the environment, the subject of new vehicle fuel economy has received a great deal of attention. Yet, the fact remains that today's newest automobiles are the cleanest, most fuel efficient vehicles ever produced, and new vehicles sold each year represent approximately 1% of total Canadian Greenhouse gas emissions annually.
Canadian consumers today have a wide variety of fuel efficient vehicles to choose from featuring the latest technologies such as continuously variable transmissions, electric-gasoline hybrid power trains, new clean diesel engines, and cylinder deactivation. In fact, for years, Canadians, more than American consumers, have embraced small, fuel efficient vehicles. It is this market trend, combined with technological developments that drove Canada's auto companies to commit in 2005 to the Government of Canada to reduce GHGs by 5.3 million tonnes by 2010. In other words, the marketplace in Canada has made fuel economy a priority, without government mandates, incentives, taxes or penalties
It is for these reasons and more, that we at Chrysler Canada, and many other Canadian car companies, are concerned about the system of ecoAUTO rebates, which are available on select models, and the Green Levy fee which penalizes consumers who require larger vehicles with more people and cargo carrying space, and towing ability.
Chrysler's concerns about the program exist despite the fact that Chrysler has among the industry's highest number of vehicles that qualify for the $1,000 to $2,000 ecoAUTO fuel-efficiency rebates, including the new four-cylinder engine-powered Jeep Compass and Jeep Patriot and Flexible Fuel V-6 powered Chrysler Sebring and Dodge Avenger models. These new fuel efficient vehicles have propelled Chrysler Canada to be the second leading seller of vehicles in Canada this year, behind General Motors. And also, like Toyota and others, Chrysler offers smaller-sales volume multi-passenger sedans, sport utility vehicles and sports cars that get a $1,000 to $4,000 penalty tax tacked onto the purchase price.
Besides using taxpayer dollars to interfere with a market that already has a preference for good fuel economy, there are three main concerns with the current Vehicle Efficiency Incentive program:
1) By relying on arbitrary fuel economy rating cutoffs within each vehicle segment, the incentives makes winners and losers out of different brand vehicles that have minor differences in fuel efficiency.
2) Not all fuel-saving technologies are treated equally in this program. Advanced clean diesel engines can save 25%-35% fuel, but do not get the incentives that hybrid and ethanol type power trains receive. Clean diesel engines power more than half of all vehicles sold in Europe due to their fuel efficiency, but get ignored in the ecoAUTO program.
3) Today's automobiles, including larger sedans, trucks and sport utility vehicles are the most efficient and low-emissions ever produced. Yet, we are taxing Canadian consumers who legitimately need to buy them to transport people, cargo or do towing, for work or recreation. This added tax on these newest vehicles can lead consumers to hold onto their older, less environmentally-friendly large vehicles for longer periods. This will ultimately work against the goals of the program.
No matter how you judge this program, or try to fix it, the bottom line is that Canadian consumers and the Canadian auto industry are already moving in sync towards greater fuel efficiency. The added bureaucracy and expense of this taxpayer-funded Vehicle Efficiency Incentive program does not deliver the intended results, and in many cases drives consumers in the opposite direction. And lastly, Canadians need to consider the economic wisdom of using taxpayer dollars to subsidize the price of vehicles that are built, for the most part, outside of Canada.
We would encourage either the termination of this program, or the broadening of it to treat all technologies and consumers equally and to help replace the oldest vehicles on the road, which offers the greatest opportunity to improve air quality.