Gas Prices: The Calm Before the Storm for Electric Vehicle Sales?

With the return of the federal subsidy and the sharp rise in gas prices, more and more consumers are considering purchasing an electric vehicle.

“It’s kind of like the calm before the storm. We’ve been getting a higher volume of inquiries over the past two weeks,” says Simon Lachance, a sales representative at Bourgeois Chevrolet Buick GMC in Rawdon.

“There’s more enthusiasm for electric vehicles, but not like in 2024, when it was a real craze.”

For now, even though the dealership is getting more calls, these inquiries aren't translating into sales.

“We haven’t seen a dramatic increase,” adds Mr. Lachance. “We’re gradually seeing a return to our usual sales levels for electric vehicles (about 40 per month). And there’s one unknown factor: how long the war will continue to affect gas prices.”

A narrowing gap

Before the outbreak of the conflict in the Middle East, the federal government reinstated its $5,000 purchase subsidy with new terms and conditions.

To be eligible for this financial incentive, the vehicle’s price must not exceed $50,000. Manufacturers have gone to great lengths to offer hybrid and fully electric vehicles at this price point.

“There’s a real buzz on the sales floor,” says Jacques Olivier, president of Groupe Olivier, which owns 24 dealerships.

With this maximum amount, customers are noticing that the price gap between an electric vehicle and a gasoline-powered one is narrowing.

Last week, one of his customers traded in a Ford Edge to purchase a Mustang Mach-E.

“It would increase his monthly payment by $120, but his immediate reaction—given the current cost—was to tell me he’d save $300 a month on gas,” says Mr. Olivier. “That’s the kind of thinking we’re seeing more and more of.”

And when it comes to subsidies, it’s also worth noting that the provincial government is offering a $2,000 rebate for a fully electric vehicle and a $1,000 rebate for a plug-in hybrid.

A trend to be confirmed

As for the Quebec Automobile Dealers Association, its CEO remains cautious in light of the events of the past two weeks. 

“The current situation may spark interest in electric vehicles of all kinds,” notes Ian P. Sam Yue Chi. “When gas prices rise, consumers start looking more closely at alternatives, especially with the return of the federal subsidy.”