Electric vehicle sales have dropped by nearly 45 per cent from what they were a year ago and they’re not expected to rebound soon unless Ottawa resurrects its EV incentive.
Without federal incentives “I anticipate sales will continue to fall,” David Adams, chief executive officer of Global Automakers of Canada (GAC), an industry group, said in an e-mail.
In March, car companies sold 12,347 new battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) – down 44.9 per cent from the 22,390 EVs sold in March 2024, Statistics Canada said this week.
That means EVs counted for 6.5 per cent of all the vehicles sold in March, down from 12.9 per cent the previous March.
This wasn’t the first month of a sharp decline. In February, 8,531 EVs were sold, representing a decline of 41.3 per cent compared to the previous February. In that month, EV sales accounted for 6.8 per cent of all new vehicle sales.
Last year, 264,277 EVs were sold in Canada – an average of about 22,000 a month. They counted for nearly 13.8 per cent of total sales.
While EV sales suffered in March, overall vehicle sales grew 9.4 per cent from the previous March, mainly owing to a surge in gas-powered SUV sales.
The biggest reason for the drop in EV sales this year? Adams blames the sudden pause of the $5,000 federal iZEV rebate program on Jan. 13 after it ran out of funding over a single weekend.
Most provinces also have their own EV rebates. But two other recent changes to provincial rebate programs also hurt EV sales, he said.
First, Quebec paused its $7,000 rebate in February and March because it had run out of money after a surge in EV sales. That program resumed in April with a lower $4,000 rebate, which will drop to $2,000 next year and end entirely in 2027.
Also, British Columbia made fewer cars eligible for its $4,000 rebate last year before shutting the program down entirely.
Without rebates, most EVs cost at least $10,000 more than an equivalent gas-powered model. While that price gap is expected to narrow as batteries get cheaper, it’s still a deterrent for some buyers, Adams said.
Uncertainty over the economy and U.S. tariffs could also have kept some Canadians from buying an EV.
“Anytime there is economic uncertainty, people get worried about jobs and avoid big-ticket purchases,” he said. “Sales [of gas-powered SUVs] have been up because I think folks were trying to benefit from pretariff pricing."
Tariff impact
Canada’s 21.25 per cent counter-tariffs will also make American-built EVs more expensive here, Adams said.
But Daniel Breton, chief executive officer of Electric Mobility Canada (EMC), an industry group, said that nearly all EV models sold in Canada by automakers that build both gas and electric cars aren’t built in the U.S. and won’t see counter-tariffs.
But Electric Mobility Canada (EMC), an industry group, said that most EV models sold in Canada by automakers that build both gas and electric cars aren’t built in the U.S. and won’t see counter-tariffs.
Hyundai, for instance, builds its new Ioniq 9 all-electric three-row SUV in both South Korea and the U.S., but it will only be selling Korean-built models here.
The car makers most affected by counter-tariffs are American EV-only brands Lucid, Rivian and Tesla, all of which sell cars here built in the U.S., he said.
When we asked Transport Canada whether it plans to resume rebates, it said “the government’s priorities will be laid out” in the speech from the throne on May 27.
During the Liberal leadership campaign in February, then-candidate Mark Carney said his government would be “looking at” a rebate program.
Breton is optimistic that Ottawa will bring back a rebate “in some form.”
“What we need is a predictable program,” he said. “They need to say from the beginning that it will start at $5,000 the first year, for example, and then decrease every year. That way, buyers know what to expect.”
A new rebate should be based on income and it should be “one per customer, instead of having the same people get three or four rebates,” he said.
Breton thinks the dip in sales will be temporary as buyers wait to see if the rebate will resume.
“Quebec counts for 40 to 50 per cent of EV sales in Canada,” he said. “So when there were no [federal or provincial] rebates, people would put down a deposit at the dealers but then wait for delivery. I expect we’ll see numbers go up in April.”
Adams predicts sales will continue to gradually increase without government incentives, but they won’t go back to previous levels anytime soon.
He said “sales fell off a cliff” when Premier Doug Ford’s government axed Ontario’s $14,000 provincial EV rebate in 2018.
“Sales have come back [there],” he said. “It just took a long time.”.
If Ottawa doesn’t bring back an EV rebate, it should be investing more in charging infrastructure, Adams said.
That would include money for building more public fast chargers and for installing home chargers, including in condos and apartments.
“This can actually have a much larger impact [on sales] than purchase incentives,” he said.
GAC and the Canadian Vehicle Manufacturers’ Association (CVMA), another auto industry group, have long opposed the federal EV sales mandate that will require car companies to only sell EVs, PHEVs and hydrogen fuel cell vehicles (HCEVs) by 2035 or face penalties. Quebec and British Columbia have their own EV sales mandates on top of that.
Without the federal rebate, the mandates will be even harder to meet, Adams said.
“Unless these targets are adjusted in all three jurisdictions, it will only mean more hardship and turmoil for an industry already under a tariff siege,” he said, adding that most consumers who try EVs prefer them to gas-powered vehicles. “It is always going to be consumers that drive that transition – not [EV] mandates or anything else.”