Carbon tax could mean an increase in electric and hybrid vehicles

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Carbon tax could mean an increase in electric and hybrid vehicles
WATCH: With a carbon tax increasing the price of gas next year, it's yet to be seen how it will impact consumer demand, but vehicle manufacturers are already reacting. Katelyn Wilson explains – Nov 1, 2018

As SUVs and trucks become more fuel efficient, some dealerships have seen a decrease in car sales, and that’s why Ford is sticking with its plan to phase out its car models in North America over the next couple of years.

“F150 and the Escape is the No. 1 seller for us,” general manager of Capital Ford Lincoln, Ivan Leibel said. “The car sales for us have really diminished over the last few years. [Ford] is just responding to what customers want, like and ultimately will buy.”

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Although the Mustang will still be available, with the federal government’s carbon tax coming into effect in 2019, many are questioning how much it will influence the type of vehicles that drivers will purchase.

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The average person in Saskatchewan will pay an extra 4.42 cents per litre at the pumps next year, with that number expected to increase every year reaching 11.27 cents by 2022.

While the sale of hybrid and electric vehicles have increased over the past year, they still remain a small percentage of the market. But experts say carbon pricing will make these vehicles a lot more attractive.

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“We know that the sale of electric vehicles are going up but over time, if we start to see the infrastructure in place — more charging stations — and start to see the technology improve somewhat — longer ranges for travel — but until we get those ranges, people still might be staying away,” assistant economics professor at the University of Regina, Brett Dolter said.

He added that many major car companies are already talking about transitioning to an electric future.

“There seems to be a real push from Ford Motor Company and other manufacturers to supply more electric vehicles; hybrids, plug-in hybrids. By 2024, 50 per cent of its product lines will have those types of options,” Leibel said.

“Currently, we’re not seeing a real big take rate on electric vehicles or hybrids but as production ramps up, potentially the cost of those vehicles will go down.”

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In the meantime, car manufacturers continue to focus on making smaller, more efficient engines, as buyers become more environmentally conscious.

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