Will Canada’s election results bring a paradigm shift to ZEVs?

Highlights

  • The Liberals and Justin Trudeau are committed to reaching a zero-emission level by 2050.
  • The New Democratic Party (NDP) promised to waive off federal sales tax on ZEVs according to its election mandate.
  • The S&P/TSX Capped Energy Index was down 2.84 per cent, on an intraday basis (September 21, 5:39 ET)

As the results of the Canadian election are set to unfold, Canada’s main stock market index, the S&P/TSX Composite Index, saw a single-day decline of 1.64 per cent. This market reaction could be owed to anxiety and uncertainty around who forms the next government.

The index hit an intraday low of 19,982.19. The index reached 20,154.54 down by 335.82 points (September 21, 6:40 ET).

On the other hand, the S&P/TSX Venture Composite Index closed down to 853.89, a decline of 3.71 per cent.

Major swings in the financial markets are often witnessed during any significant political or economic event, and even the most developed and matured financial markets also are subject to such events.

A consensus opinion says that the Liberals and Trudeau will retain power with a minority government.

To remain in power and seal the election, the liberal government had promised that half of the passenger vehicles sold in the country would be zero-emission vehicles (ZEVs) by 2030. As a part of its election mandate, the liberals promised to offer incentives for buying electric vehicles (EVs) or zero-emission vehicles, and it also pledged to build 50,000 charging stations.

Under the leadership of the current Prime Minister Justin Trudeau, Canada has established a remarkable reputation in the electric vehicle segment. The government supported the auto industry in investments and the need to cut down greenhouse gas (GHG) emissions, and Canada had committed to reaching zero-emission levels by 2050. 

On the other hand, in its election mandate, the New Democratic Party (NDP) promised to waive off federal sales tax and offered an incentive to purchase made-in-Canada ZEVs. The political party is also keen to provide a rebate on installation costs of the electric chargers used for ZEVs.

Also Read: TSX gains as energy stocks rebound, Denison & Vermilion top gainers

The Conservatives stated that under them nearly 30 per cent of the light-duty vehicles sold would be zero-emission by 2030. An up-gradation of the electricity grid and charging infrastructure are also expected from them.

The S&P/TSX Capped Energy Index climbed down by 2.84 per cent, on an intraday basis (September 21, 5:39 ET). However, the index posted a Year-to-Date (YTD) return of 39 per cent.

NFI Group Inc (TSX: NFI), a leading manufacturer of electric buses and coaches commented that on September 16 that one of its subsidiaries, New Flyer of America Inc., had received a contract to manufacture 19 electric buses and charging stations from Lane Transit District (LTD). The order received from LTD supports their goals to reduce 75 per cent of GHG emissions by 2030 and reduce the dependence on fossil fuel by 2035.

Image Description: The S&P/TSX Composite Index dropped 1.64 per cent single-day on September 21, 2021 

Also Read: NIO & Tesla Stocks Zoom As Electric Vehicle Market Heats Up

Bottom line:

Irrespective of which political party forms the government in Canada, the agenda to reduce the emission levels of greenhouse gases and the use of fossil fuel, and the agenda to promote the sale of zero-emission vehicles or electric vehicles serves as one of the priorities of each political party contesting the election.

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