Who will win and lose in the push to sell electric vehicles?

This is a fitting place to show off a fleet of plug-in electrified vehicles – in 2018, Quebec plans to start fining auto makers who don't sell enough EVs, but BMW is confident it can meet the tough provincial targets.

Bill 104 is a complicated piece of legislation that gives all mass-production auto makers a system of credits for their sales of electric vehicles, and which demands a minimum percentage of their Quebec fleets must be electric. In 2018, the first year of the bill's enforcement, at least 3.5 per cent of an auto maker's sales in the province must be EVs. If it falls short, as many will, that auto maker must buy the missing credits, either from the government or from a maker with a surplus.

That's a steep challenge for traditional auto makers, since electric-car sales in Canada in 2016 were only half of 1 per cent. Some manufacturers, such as Subaru and Mazda, don't even have any plug-in EVs to offer for sale. It will become even more challenging as the target increases through successive years, ending with a goal of 22 per cent of Quebec sales in 2025 to be electrified vehicles.

BMW is better prepared than most, however. It sells seven different plug-in vehicles, including the just-released Mini Cooper S E Countryman. In 2016, 2.3 per cent of its overall sales were EVs and that ratio is expected to increase in 2017.

"Out of all the [original equipment manufacturers], we're perhaps in one of the best positions – this is something we've been looking at internally for a year or two," says Matthew Wilson, BMW's national manager of product planning. "We are forever anticipating changes, not only in Quebec but federally. These are things we have to factor into our long-range planning. Regulations are not softening, by any means."

As with the other auto makers, BMW is helped considerably by provincial rebates that knock thousands of dollars off the price, but only Ontario, Quebec and British Columbia offer such subsidies; 95 per cent of all Canadian EV sales are in those three provinces, and the other provinces have no plans to implement similar programs.

Six of BMW's seven EVs are plug-in hybrids, which means their electric batteries will carry them only 20 to 25 kilometres on a full charge and their gas engines do most of the work on longer journeys; the electric motors are designed to kick in for city driving or to boost performance. The German maker only sells one car that is entirely electric, the subcompact i3, and even it is far more popular when it's equipped with an optional gas-powered "range extender" engine fitted alongside the electric motor. For every pure electric i3, BMW Canada sells four with the additional gas engines.

The rebates are essential to tempt drivers into cars that are much more expensive than conventional vehicles. Few drivers are willing to pay the extra price for producing no emissions if they can't see either a direct savings or boosted performance. The amounts of the available subsidies vary with factors such as the price and size of the car, and the level of its electrification, but in Ontario, the rebate will sometimes more than cover the additional cost.

The BMW 530e, for example, starts at $66,900, and qualifies for a rebate of $4,000 off that price in Quebec and $2,500 in British Columbia. In Ontario, however, buyers will get $8,460 back, and that prices the car at almost $6,000 less than the equivalent all-gas 530i, with no reduction in performance. The driver also gets a green licence plate, allowing the car to use HOV lanes with only one person inside.

Similarly, the plug-in variants of the 7 Series and the X5 are cheaper than the all-gas versions, with a savings in fuel, too – but only in Ontario after the rebates.

The totally electric i3 gets the most generous Ontario rebate: $13,000 from a base price of $48,150. It's still expensive, but $35,000 is much easier to stomach for a small car that's fun to drive in the city.

So BMW is not there yet, but it's optimistic it can meet the Quebec targets. There will be a much-anticipated all-electric three-door Mini-E in 2019, and an all-electric X3 the following year, as well as others that haven't yet been revealed.

Head office in Germany says it expects at least 15 per cent of its total international sales in 2025 to be electrified vehicles, and perhaps as much as 25 per cent. It all depends on extending the driving ranges and bringing down the price of the equipment so that rebates and subsidies are no longer needed.

"We don't take Quebec as a one-off," Wilson says. "This is something that could very well happen federally, and if it does, we have scenarios to ensure we can meet those targets."

It helps BMW that it's a manufacturer of premium cars. If it falls short and must buy credits from the government or – worse – from its competition, it can disguise that cost in an already high price tag. Other makers are not so fortunate. In the brave new world of electric vehicles, there will be winners and losers during the next decade, and the outcome is far from clear.

The writer was a guest of the auto maker. Content was not subject to approval.

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