Friday, July 17, 2009

Ontario Gives $10K Cash for Residents Buy Electric Vehicles.

In a bizarre and very controversial move, the Ontario government announced it is giving $10k cash rebates to residents who buy electric vehicles. There are many issues with this. Toyota is slamming the government as the move is seen as a boost to GM's Volt vehicle, as reported by the Financial Post. Ontario now owns part of GM as part of its bailout.

" the move looks like a deliberate ploy to help General Motors Co. -- of which the provincial and federal governments are now minority shareholders."

The announcement was made at a GM dealership on Toronto. One wonders what was Mr. McGuinty thinking (election?). Absolutely puzzling. The article is right in mentioning that the technology is not proven or reliable. However, what the article fails to mention is that Ontario suffers from lack of hydro capacity a peak times. It's hydro infrastructure has not been modernized or expanded in many years. Where exactly they think the energy that will be needed by the vehicles will come from is anyone's guess. Imagine if a good number of vehicles is suddenly hydro-powered! This is sure to backfire. In addition, the province faxes a mounting deficit. Who will eventually pay these $10k? Current or future residents, that's who.

I would love to own an electric vehicle, not because it does not use gasoline, but because it is quiet, and does not have many parts that break in the modern cars: coils, pistons, oxygen sensors, etc. However, the ramifications of this idea are not well-thought out, and these 10k are eventually coming off the residents own pocket - through taxes.

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