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Quebec becomes latest market to adopt ZEV mandate after important push by Tesla

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Earlier this year, Tesla made an unusual move for the company and hired two well-connected lobbyists in Quebec to push for a ZEV mandate in the Canadian province. Tesla’s effort was successful this week as the ZEV mandate was unanimously adopted by Quebec’s National Assembly.

Quebec is already an important market for electric vehicles since it is buying 45% of the electric cars in Canada despite representing only 23% of the country’s population, but a ZEV mandate will increase the number of electric vehicles available in the market and encourage automakers who are already investing in selling EVs in Quebec, like Tesla.

Quebec becomes the first Canadian province and 11th North American market, after 10 US states, to adopt a ZEV mandate.

The law is modelled after the one in California, where the Zero Emission Vehicle (ZEV) Mandate originated and where it has been the most efficient in accelerating the growth of electric vehicles. The mandate also helped Tesla generates hundreds of millions in revenue by selling its excess credits to other automakers.

Quebec’s ZEV mandate works the same way. It forces automakers to sell electric vehicles for credits in order to compensate for their gas-powered vehicle sales or to buy the credits from other automakers who have a surplus, like Tesla since it only sells EVs.

It pushes for the market share of electric vehicles to increase to 3.4% in 2018, 6.9% in 2020 and 15.5% in 2025. California has a similar gradual approach leading to 15% in 2025. In 2015, only 0.7% of vehicles sold in Quebec were zero-emission (~3,000 on ~412,000).

Last week, we reported on a problem with California’s ZEV mandate that resulted in some automakers not needing to reach those EV market shares by stockpiling credits bought at cents on the dollar.

The California Air Resources Board (CARB) is currently considering strengthening the mandate, but it faces opposition from most automakers, except Tesla.

When Quebec was still considering the proposed ZEV mandate earlier this summer, Tesla also sent its Director of Business Development and Government Affairs, Ken Morgan, to make the case for a strong mandate during a hearing by the environment committee.

During his presentation, Morgan hinted that Tesla will prioritize Model 3 deliveries in markets with ZEV mandates, which should accelerate the rollout of electric vehicles in those market when Tesla starts volume production of the Model 3. They are aiming for late-2017.

Some countries, like Norway and the Netherlands, are exploring much more aggressive ideas for ZEVs having a 100 percent market share within the same timeframe (2025). All those countries, states and provinces, including Quebec, are part of the International Zero-Emission Vehicle Alliance, which aims at making all passenger vehicles emission-free by 2050.

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