The reintroduction of federal incentives has helped to accelerate electric vehicle interest and sales across Canada.
According to Statistics Canada, while 124,004 new vehicles were sold in Canada in February – a 0.9-per-cent drop from the same month last year – the share of zero-emission vehicle sales (which include fully EVs and plug-in hybrid electric vehicles) shot up 47.2 per cent from a year earlier, with 12,626 ZEVs sold in February. That accounts for 10.2 per cent of total new vehicles sold in the country, compared with 6.9 per cent in February 2025.
The federal government launched the new Electric Vehicle Affordability Program (EVAP) on Feb. 16 to replace the former Incentives for Zero-Emission Vehicles (iZEV) program, which ended in early 2025 after its funds were depleted. The new initiative offers up to $5,000 in rebates for battery electric vehicles (BEVs) and $2,500 for PHEVs that cost less than $50,000.
Many experts believe more Canadians will jump on the electric bandwagon as gas prices spike, especially when it comes to PHEVs, which are narrowing the sales gap with BEVs from about three to one to about two to one.
Canada’s new $5,000 EV incentive is different from the old one. Here’s how it works
“While incentives are clearly playing a key role, higher fuel prices are also reinforcing this trend by pushing more Canadians to consider fuel-efficient options like hybrids,” said Baris Akyurek, AutoTrader’s vice-president of insights and intelligence. “We’re seeing a clear acceleration in new hybrid demand on AutoTrader.ca following the federal incentive announcement. Year-over-year growth reached as high as 30 per cent in the week of the announcement and has remained consistently strong since.”
Some automakers are dropping prices on PHEVs or are offering dealer or manufacturer incentives to lower the price to less than $50,000. But the EVAP incentive works differently than under the iZEV program and navigating the rebate can be confusing. It isn’t just the price of the base model that matters, but the sales price before fees and taxes on the trim that is purchased.
Here are five popular PHEVs, but not all trims qualify for the rebate.
2026 Mitsubishi Outlander PHEV
When the refreshed 2026 Outlander PHEV was unveiled in Montreal in January, the price was $50,498. But rebates returned, Mitsubishi dropped the price to $49,998, plus $1,875 for freight and $250 for pre-delivery inspection (PDI). So, the base 2026 Outlander PHEV ES trim qualifies for the rebate, but the other six trims don’t.
It’s a better deal than the 2025 model and has more features, including extra power and a larger 22.7-kilowatt-hour battery pack with up to 72 kilometres of range, up from 61. The base model also features a new Yamaha audio system with eight speakers, wireless Apple CarPlay and Android Auto, third-row fold-flat seats, heated front seats and safety measures such as a lane departure warning system and rear automatic emergency braking.
For rain-sensing wiper blades, heated second-row seats, ventilated front seats or leather-appointed seats, upgrade to the SEL trim, which costs $57,598, plus freight and PDI. However, without huge dealer incentives, there’s no rebate here.
The 2026 Outlander PHEV looks similar to the 2025, but one subtle difference is the new wheel design.Petrina Gentile/The Globe and Mail
2026 Toyota RAV4 PHEV
The all-new 2026 RAV4 PHEV delivers more power, greater all-electric range and a lower price than the 2025 model. Starting at $48,750 before freight and PDI ($52,408 with those included), the RAV4 PHEV qualifies for the $2,500 rebate.
It has a 2.5-litre four-cylinder engine, two electric motors, a large battery and high-output charger. And it delivers 324 combined horsepower – that’s up 22 from the 2025 model. Its electric range has increased to 80 kilometres, a 20-per-cent gain.
The base SE model comes with a power moon roof, rain-sensing wipers, heated front seats, power-adjustable driver’s seat and a heated and leather-wrapped steering wheel. The RAV 4 PHEV is available in four trims, including the first GR Sport model, which includes red brake calipers, paddle shifters, a sport-tuned suspension with performance dampers and GR interior seat designs with red stitching. But the GR Sport’s $57,500 price tag eliminates the rebate unless dealers offer a large incentive. That goes for the other two trims as well: the XSE ($56,400) and the XSE Technology ($59,350).
2026 Toyota RAV4 PHEVNATHAN LEACH-PROFFER/Courtesy of manufacturer
2026 Ford Escape PHEV
The Ford Escape PHEV is one of the cheapest on the market, starting at $41,599 plus $2,395 for freight and PDI. The base model features a 13.2-inch centre infotainment screen, a heated steering wheel, a power liftgate and up to 60 kilometres of range.
Even with the $3,900 premium package, it qualifies for the rebate while adding extra convenience features such as a 10-way power driver seat, a six-way heated power passenger seat, a Bang & Olufsen sound system with 10 speakers including a subwoofer, a head-up display, a wireless charging pad and distinct interior accents. Throw in a Class II trailer tow package for $700 and you’ll get a hitch receiver and wiring for up to 3,500 pounds of towing. That’s a lot for less than $50,000.
2026 Kia Sorento PHEV
The Kia Sorento three-row PHEV starts at $48,695 ($51,540 including freight, PDI and additional fees) so the base LX trim qualifies for the rebate, but the two higher trims don’t.
Powered by a 1.6-litre turbocharged gasoline engine with all-wheel drive, dual electric motors and a 13.8-kilowatt-hour battery, together they delivers 268 horsepower and 270 lb-ft of torque. It has up to 55 kilometres of range and a fuel economy rating of 6.9 litres per 100 kilometres combined driving.
It also has heated front seats, a 12.3-inch multimedia display, Android Auto and Apple CarPlay, over-the-air software updates, nine airbags and smart cruise control with stop-and-go features. An upgrade to a top-of-the-line SX trim with leather seats, a panoramic sunroof and a digital key means no rebate.
Kia also sells the two-row Sportage PHEV, and the two lower trim levels qualify for EVAP. Hyundai sells a similar Tucson PHEV, but only the 2025 model qualifies for it because of a $4,000 incentive lowering its price to less than $50,000. The 2026 Tucson PHEV costs around $56,000.
2026 KIa Sorento PHEVCourtesy of manufacturer
2026 Mazda CX-70 PHEV
The 2026 Mazda CX-70 PHEV’s starting price is $52,750, plus freight and PDI. However, depending on manufacturer and dealer discounts, the base GS-SC trim could qualify for the rebate.
That means you’d get a 2.5-litre four-cylinder engine and dual electric motors. Combined, they deliver 323 horsepower and 369 lb-ft of torque. It has up to 51 kilometres of electric range, a combined fuel consumption of nine litres per 100 kilometres and it comes with a 10-way power driver’s seat, reclining and sliding rear seats and a forward-sensing pedestrian detection system.
The PHEV version has about 40 more horsepowerMark Richardson/The Globe and Mail
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